Foxconn Planning to Sell Its Own Branded Accessories after Apple's Dip in Profits
Foxconn is planning to diversify its business and is even planning to build, brand and directly sell its own electronics accessories compatible with devices such as Apple’s iPhone and iPad. Details about Foxconn’s internal plans were shared with The Wall Street Journal
by an unnamed executive at the company, which is also known as Hon Hai Precision Industry Co. According to the recently published report, Foxconn is “aggressively” moving to add new clients and expand its business to reduce reliance on Apple.
Foxconn saw its revenue fall 19% in the first quarter of 2013 though net profit was up 2.9%. The revenue reduction coincided with Apple’s first year-over-year profit decline in a decade. Market watchers suspect that Apple is responsible for about 50% of Foxconn’s revenue, though the company doesn’t offer such numbers in detail. According to the unnamed executive, Foxconn plans to be able to supply all of the components for devices it assembles. As of right now, Apple must buy their components from multiple vendors and provide them to Foxconn to have the final product assembled.
Beyond its manufacturing plans, Foxconn is also reportedly interested in selling its own branded accessories, including cables, headphones and keyboards that would be compatible with Apple products such as the iPhone and iPad. The company may sell its own electronics and those of its partners directly according to the report. The company is said to be investigating online retail operations because the sales could generate higher margins than its current manufacturing efforts.
Foxconn’s efforts to lessen its reliance on Apple’s iPhone for its profits were first mentioned earlier in the month. The recent report offers more specifics on what those plans may entail though. The company has also shown increased interest in televisions and bought a significant stake in Sharp as part of those plans.
We’ll have to see how successful Foxconn is in executing their plans and how this will affect companies such as Apple.
Source: The Wall Street Journal