Foxconn Aims to Produce Branded Apple Accessories
Several weeks ago we told of Foxconn’s alleged plans to move forward without Apple – or at least to diversify its client base. The report also suggested that Foxconn is ready to provide Apple with the necessary technology to manufacture the iTV; it also highlighted that chairman’s thoughts about stepping out as a brand, rather than existing in the shadows and manufacturing for other brands.
The most recent report published by the Wall Street Journal apparently reinforces the company’s move in the latter direction: to increase its manufacturing volume, Foxconn is reviewing plans to sell its own brand of electronics accessories, seeks to enter the world of mobile applications, cloud services and hopes to improve profit margins, according to anonymous executives.
Hon Hai’s ultimate aim is to be able to supply content for all of the devices it assembles, executives familiar with the company’s strategy said. The company is hiring software engineers for its research and development center in southern Taiwan, who will focus on developing mobile applications, cloud computing technology for servers and applications for smart watch devices. Company executives declined to disclose the amount of investments being made in software and content.
Hon Hai is also reviewing plans to make accessories such as data transmission cables, headphones and keyboards under the Foxconn brand, said executives who have direct knowledge of the plan.
“Chairman (Terry Gou) has ordered all business units to produce peripheral accessories of electronics products as it is more profitable than assembly services. We also plan to license Apple’s technology to make some own-brand accessories that are compatible with iPhones and iPads,” said one of the executives.
Apple accounts for a huge chunk (50%) of Foxconn’s profits. The Cupertino, California company has posted its first profit drop in a decade during the first calendar quarter that ended in March. As Apple has slowed down, Foxconn has seen its first quarter revenue falling by 19%, despite net profits rising nearly 3%.