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Business

Wistron to benefit from Apple's supply chain diversification

Foxconn and Pegatron's smaller rival hopes smartphones will make 20% of revenue

TAIPEI -- Wistron, an up-and-coming iPhone assembler, is counting on new smartphone business from Apple to lift it out of the continuing slump in the PC market.

The smaller rival to Hon Hai Precision Industry and Pegatron said that it expects smartphones to account for a bigger portion of its sales this year, compared with 2016.

"We expect smart devices this year would reach 20%, or more than 20% possibly, in our business portfolio," in 2017, up from 16% last year, Wistron Chairman Simon Lin told analysts during an earnings call on Monday. "From 2017 onward, we will change our portfolio bigger than ever."

PCs remain the main source of income for Wistron, accounting for 45% of the company's revenue in 2016 and again in 2017. The Taiwanese company also makes servers, competing with Quanta Computer unit QCT for customers in North America.

Lin added that he expects both net profit and earnings per share to improve this year thanks to its smartphone business.

According to Arthur Liao of Taipei-based Fubon Securities, Wistron shipped about 9.8 million 5.5-inch iPhone 7 Plus in 2016, and its Apple orders would increase to 17.5 million handsets this year.

Analysts expect Wistron to secure orders for the new 5.5-inch iPhone 8 with liquid crystal display and churn out iPhone SE at its facility in Bangalore, India soon. The company has not confirmed its new iPhone business in India and did not offer any comment on Monday.

For all of 2016, Wistron's net profit more than doubled to 2.96 billion New Taiwan dollars ($96.93 million) on revenue of NT$659.9 billion, up 5.88%. EPS was NT$1.2.

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