Sam Oliver
A new profile of Foxconn describes how the company is looking beyond Apple, its largest manufacturing partner, even as it positions itself for the prospect of an Apple-built television.
Foxconn's somewhat paradoxical approach was described in a report this week from The New York Times, which said that Foxconn and its chairman, Terry Gou, are "contemplating life far, far beyond Apple." The company is reportedly interested in lessening its reliance on Apple, which has seen its growth slow in recent quarters.
Apple CEO Tim Cook touring an iPhone production line at a Foxconn plant in Zhengzhou, China.
Instead, the company is now interested in developing products of its own, and has also begun designing and manufacturing high-definition television sets. Foxconn's interest in televisions led the company to buy a stake in panel maker Sharp.
Foxconn's interest in Sharp has helped to fuel rumors of a potential Apple television set — a product that has long been rumored. And this week's Times story even noted that Foxconn's efforts to vertically integrate television manufacturing could "represent anticipation that orders for an Apple television" could land with the company.
And so, strangely, while Foxconn is allegedly working to lessen its reliance on Apple, the company is also making moves potentially driven, at least in part, by rumors of an unannounced Apple product.
Earlier this year, Foxconn's first-quarter revenue was down 19.2 percent year over year. Those losses were attributed largely to declining orders of the iPhone and iPad from Apple.
In a somewhat unexpected approach, Apple has not released any major products thus far in 2013. The company signaled that isn't likely to change anytime soon, as CEO Tim Cook signaled last week that major new products will be arriving this fall and throughout 2014.
The lack of new products has led to fewer orders, as a number of companies in Apple's supply chain have cryptically cited slipping demand from a major unnamed customer. In years past, iPhone and iPad launches were staggered throughout the year, allowing Apple to maintain hype and public mindshare through its two most popular product categories.
For its part, the Times has made Apple a target, particularly in its "iEconomy" series that investigated Asia's technology supply chain. That nine-part series had a particular focus on Apple, and netted the publication a Pulitzer Prize for explanatory reporting.
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56 Comments
Diversification is a good strategy. I'm sure someone will turn this into "Apple is failing in the face of Samsung." It is encouraged in the Arena for the amusement of the Providers.
Foxconn has seen Sammy's success copying Apple, they will join the party next.
Supplier companies always have their eyes on the leader, they would like to emulate the success and brand recognition of leading brands whether it be Sony, Apple, Caterpillar, BMW or whoever. Subcontracting/outsourcing is a gift in technology transfer and when the supplier is well known as has become the case with Foxconn making Apple products for so long they are bound to want to leverage their new found brand recognition. Nothing wrong with that, it's the way of business, the way of life, what is wrong is how Apple has let go of their core, the making of the products that bear their name and give them the brand recognition.
Forget ethics. Forget whom we are looting. Forget how we are earning. Forget whom we are ignoring. We have to be on top. Why only Sammy? Why not me?
It's dangerous whenever one company relies heavily on another. Look at what Walmart did to Rubbermaid.
It's probably good for Foxconn to contemplate life 'far, far beyond Apple' because Apple is quite likely contemplating life 'far, far beyond Foxconn' and if this book is to be believed - https://itunes.apple.com/au/book/radical-abundance/id638267782?mt=11 -, we might be looking at a very, very different manufacturing economy for everyone before too long.