Peak Apple: Foxconn contemplating life after Cupertino
Originality threatens fruity firm's dominance
Foxconn is reportedly planning for an Apple-free future after a massive slump in orders from Cupertino.
Apple's favourite production company is moving away from simply building other people's designs and trying to break into a new market with the introduction of a range of flatscreen televisions.
However, since their introduction into the Taiwanese market at the end of 2012, they have sold just 20,000 units, which does not suggest an entirely reliable post-Apple income for the manufacturing giant.
With this in mind, there is a chance that Foxconn's television strategy is just a precursor to building the much-gossiped about iTelevision - which has not been confirmed by Cupertino.
Foxconn – or Hon Hai Precision Industry Co., Ltd, to give it its full name - recently announced a 19.2 per cent plunge in first quarter fiscal 2013 revenue, mainly due to a drop in iPad and iPhone orders from Apple, its biggest customer.
The Taiwanese company is responsible for the manufacture of Apple's hardware. But after suicides at their Chinese plant and widespread criticism about their working practices, Foxconn's reputation is significantly less shiny than the devices it builds.
Jamie Wang, a research analyst with Gartner, told the New York Times: “Foxconn senses that the Apple aura isn’t as invincible as before. So they are worried that they need something besides Apple’s business that will allow them to grow.”
Taiwanese companies are heavily reliant on companies from other countries, who design the products they build. This means Taiwan is highly sensitive to shifts in global demand.
Foxconn spokesman Simon Hsing said: "The decline in the business of our partners, such as Apple and Nokia, does affect us. We don’t want to just wait for orders. We are actively talking with many clients and asking if they can fully utilize what we make."
To back up its television production plans - and perhaps Apple's own telly dreams - Foxconn recently spent more than $800 million on buying a large stake in Sharp's LCD panel factory. The manufacture of these components can account for up to half of the cost of making a television.
Some 90% of Foxconn's 60-inch television was made using parts that were produced in-house.
Of course, the small television sales could be part of a longer plan. If Foxconn can already build televisions, it would make Cupertino's life a little bit easier if - or when - they release an iTelly.
As well as iDevices, Foxconn has built the Wii U for Nintendo, the Kindle for Amazon and the Playstation 3 for Sony. ®
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