Chinese manufacturers to keep just 1% of profits from the 1 billion phones they’ll make this year
Chinese phone makers are expected to produce more than one billion devices this year. That’s right, billion with a b. Those are a lot of handsets, you have to agree.
So you’re probably thinking that this is helping the Chinese economy in a big way, and that these manufacturers (such as the famous Foxconn that makes Apple’s stuff) are bringing in massive profits to the mainland.
Well, no. It turns out that most of the profits made on phones go to the companies that design them and market them – the Samsungs and Apples of the world. Not the Foxconns.
The actual phone manufacturers only get around 1% of the profits made on the devices they produce. And the percentage can be even lower for some cheap units made for African markets.
This situation is obviously causing some concern inside the Chinese mobile phone industry, China Times reports. Hopefully margins on devices made especially for the Chinese market are at least a little bit bigger, and since that market is constantly growing – it may help keep the phone makers alive in the future.