T.C. Gou, whose brother is grappling with a spate of suicides at Apple Inc. supplier Foxconn Technology Group, plans to open 100 stores to sell Mac computers and iPod music players in China.
Gou’s Cheng Uei Precision Industry Co. jumped its 6.9 percent limit in Taipei trading after the company confirmed plans to open its first Apple retail outlet in Shanghai by yearend. Taipei-based Cheng Uei aims for 100 stores in China within three years, investor relations spokesman T.P. Liu said by phone today.
The component-maker’s plan may help Apple add market share in China, where retail sales jumped 18.7 percent in May and which is forecast to be the biggest PC market by 2013. Foxconn, the assembler of Apple iPhones founded by Terry Gou, has raised salaries, hired counselors and installed nets near dormitories after at least 10 workers killed themselves at its China factories this year.
“He’s following the same strategy as his older brother,” said Lu Chia-lin, who rates Cheng Uei “underperform” at Macquarie Group Ltd. “The rationale is since they help make the products, they can also help sell them.”
Premium Reseller
Cheng Uei currently operates more than 20 “Studio A” Apple Premium Reseller stores in Taiwan and Hong Kong as a 51 percent owner of Studio A Inc., Liu said. Studio A contributes less than 1 percent of Cheng Uei’s revenues, said Liu, who declined to provide a forecast for the retail unit or say how much it plans to invest in China.
The company will open 100 Studio A stores in Greater China, which includes China, Taiwan and Hong Kong, by the end of next year, the China Times reported earlier today, citing Gou.
A supplier of components for Apple’s iPhone and Microsoft Corp. games consoles, Cheng Uei President and Chairman T.C. Gou, 56, has followed Foxconn into the final-assembly business, including manufacturing handsets for Huawei Technologies Co.
Hon Hai Precision Industry Co., the flagship of the Foxconn Technology Group, plans to open retail stores in China, and in April won a bid to operate the Guanghua Electronics Market, Taipei’s largest retail venue for electronics.
China’s PC sales volume will rise an average of 18 percent annually during the next five years, compared with 8 percent globally, and the nation will be the world’s biggest computer market by 2013, according to Framingham, Massachusetts-based IDC Corp.
Labor groups accused Foxconn of operating a sweatshop after worker suicides prompted Terry Gou, 59, to open his factories to the largest media gathering in company history. Gou denied his company is a sweatshop.
Asia excluding Japan provided less than 8 percent of Apple’s revenue last year, according to Bloomberg data. Apple ranks outside the top five PC vendors in China, trailing Lenovo Group ltd. and Hewlett-Packard Co., according to Beijing-based CCID Consulting.
editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net.
