Apple's go-to maker looks at life beyond fruit bowl
But now Foxconn, a potent symbol of the perks and perils of globalisation, is taking a step that, not all that long ago, would have seemed unthinkable: It is contemplating life far, far beyond Apple.
Foxconn, which is based in Taiwan but does most of its manufacturing in mainland China, wants to reduce its reliance on Apple. Its new strategy is a shift away from making products that other companies design, and towards developing products of its own, with an especially aggressive push into designing and manufacturing large, flat-screen televisions.
"Foxconn senses that the Apple aura isn't as invincible as before," said Jamie Wang, an analyst at the research firm Gartner. "So they are worried that they need something besides Apple's business that will allow them to grow."
As the biggest contract manufacturer for US electronics companies such as Apple, Dell, Hewlett-Packard and Amazon, Foxconn has been faced with labour unrest, worker suicides, industrial accidents and complaints about working conditions and labour practices. It has been working with many of its client companies to improve conditions, raise pay and improve labour standards.
"Taiwan companies have always relied on being a contract manufacturer and outsourcing manufacturer," said Luo Huai-jia, vice-president at the Taiwan Electrical and Electronic Manufacturers Association. "Now we need to start looking at original design manufacturing and directly matching the needs of consumers."
Most analysts say they believe Foxconn needs a large TV customer. And some analysts think Foxconn is just biding its time, waiting for Apple to figure how to create a game-changing TV product that will increase demand once again.
Apple and Foxconn spokesmen said they did not comment on speculation. New York Times
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Terry Gou is the founder of the Foxconn Technology Group. He built Foxconn into a major contract manufacturer that produced large volumes of iPhones cheaply for Apple, which made Foxconn a central part of Apple's supply chain and global electronics manufacturing.
According to analysts cited in the article, Foxconn senses that the 'Apple aura' isn't as invincible as before and wants other growth drivers. The company is moving away from only building products designed by others toward developing and selling products of its own, aiming to diversify revenue and reduce dependence on a single major customer.
Shifting to original design manufacturing means Foxconn would create and sell its own products instead of only manufacturing designs for other companies. For investors, this could open higher-margin opportunities and new revenue streams, but it also involves new risks around product development, branding and finding large customers—especially in competitive markets like televisions.
Foxconn is making an aggressive push into designing and manufacturing large flat‑screen TVs to diversify away from Apple. Analysts say the move could help growth, but Foxconn likely needs a major TV customer to scale successfully, and it faces tough competition and the challenge of building demand for its own branded or ODM TV products.
The article notes that Foxconn has dealt with labour unrest, worker suicides, industrial accidents and criticism over working conditions and wages. It has been working with client companies to improve conditions, raise pay and better labour standards—issues that can affect operating costs, public perception and supply‑chain stability.
Foxconn is a major contract manufacturer for US electronics companies including Apple, Dell, Hewlett‑Packard (HP) and Amazon, according to the article.
Analysts quoted in the article are mixed: many believe Foxconn needs a large TV customer to make its TV strategy work, while some think Foxconn may be waiting for Apple to introduce a game‑changing TV product that could lift demand again. Overall, analysts see diversification as necessary but not without execution challenges.
Both Apple and Foxconn spokespeople declined to comment on the speculation, according to the article.
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