According to a report released this week by The New York Times, Foxconn and its chairman, Terry Gou, is planning to lessen its reliance on Apple, which has seen its growth slow in recent quarters.
It appears that Foxconn has a new strategy, being interested in shifting away from making products that other companies design, and toward developing products of its own. In addition, it seems that the company is preparing an aggressive plan to designing and manufacturing large, flat-screen televisions.
Therefore, Foxconn’s concern for televisions conducted the company to buy a stake in panel maker Sharp. This move was much disputed, being connected to the potential Apple television set. This is the reason why, it seems that the company plans to lessen its reliance on Apple, but simultaneously, it makes moves possibly driven by the potential Apple product.
The biggest contract manufacturer for important American electronics companies, such as Apple, Dell, Hewlett-Packard and Amazon, has been facing several problems like worker suicides, industrial accidents and complaints about working conditions and labor practices.
Not only these, but this year, Foxconn’s first-quarter revenue was down 19.2 percent. The loss was associated with the decreasing orders of the iPhone and iPad from Apple. In addition to the declining orders of the iPhone and iPad, Apple has not released any significant products thus far in 2013, and it appears to be unlikely to launch main new products until this fall. Therefore, at this moment, the manufacturer company needs an extremely good business.
Is Foxconn Just Biding Its Time?
Apple’s representative refused to offer any statement regarding Foxconn’s plans. However, in accordance with the analysts, the manufacturer company’s interests have two sides as Apple contributes at least 40 percent of Foxconn’s revenue and televisions represent less than 5 percent of Foxconn’s business, far less than its revenue from Apple.
To make money in televisions these days can be difficult, and as Simon Hsing, Foxconn’s spokesman stated, only 20,000 of Foxconn’s 60-inch TVs have been sold in Taiwan. This is the only information he disclosed regarding this matter as he refused to offer sales volumes from any other partners.
However, as the lack of new products has led to fewer orders, there are many analysts who strongly believe that Foxconn is just waiting for Apple to find a solution regarding how to create a game-changing television product that will begin increasing demand once again.