Foxconn tries to move beyond Apple’s iPhone
1 min read . Updated: 07 May 2013, 08:45 PM IST
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Electronics contractor in China that was criticized for poor conditions in factories making Apple products is moving to develop its own goods, like televisions
Taipei, Taiwan: Terry Gou did almost everything that Apple Inc. could ask for. He made all those iPhones—and he made them cheap. When Apple was subsequently criticized for low wages and poor working conditions at his factories in China, it was Gou’s company, the Foxconn Technology Group, and not Apple, that caught the most heat.
But now Foxconn, a potent symbol of the perks and perils of globalization, 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 research firm Gartner. “So they are worried 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.
Representatives of Apple and Foxconn said they did not comment on speculation.
Analysts say Gou’s efforts to buy an LCD factory and vertically integrate his TV manufacturing represent anticipation that orders for an Apple television product will come his way.
“Their gamble now is if Apple will put out a TV, and they should know better than anyone else in the world," said Wu, the Credit Suisse analyst. “They’re making a bet that it’ll work." ©2013/THE NEW YORK TIMES
