Foxconn to transformation: the production of own brand products

guide language: the United States, the Wall Street journal on Friday to comment, said due to accounts receivable and profit growth is slowing, profit margins decline, is quietly for change, the transformation of its own brand manufacturing equipment.

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apple products manufacturer hon hai (foxconn) is quietly trying to transition to a private brand product manufacturers. 

recently, the $130 billion the company began to explore its own brand of mobile phone accessories, and start selling mobile phone, also plans to provide telecommunication services in Taiwan.

in some respects, create their own brand products and services is necessary. Foxconn’s revenues last year than in 2012 increased by only 1%, well below the 53% growth in 2010, the company was the first tablet for apple production, order and get the most of the apple products.

since 2009, foxconn’s labor costs increased more than doubled. Apple, SONY and Microsoft and other large customers for suppliers, looking for better pricing considerations, gave some orders to its competitors.

there are more than 1 million employees at foxconn, from mainland China from the south of zhengzhou in central shenzhen to have factory. Not satisfied of the external audit and employee protest has prompted the company to change policy, improve the wages and an increase in other costs.

foxconn’s net profit growth slowed to 13% last year; By contrast, growth levels of 37% in 2009. According to people familiar with the matter, earlier this year, apple will some of the iPhone and the outsourced production task to foxconn in Taiwan’s two rival Compal (Compal Electronics Inc.) And Wistron (Wistron Co.).

foxconn nearly half of the revenue still comes from the apple business. However, Terry Gou, founder of the company, the 63 – year – old (Terry Gou), according to this kind of low profit margins, labor-intensive OEM business is no longer enough to support the growth of the company.

at the foxconn’s annual shareholders meeting held last week, Mr Gou said the business transformation for the company in the next decade to achieve sustainable growth has the vital significance.

Established in 1974, the

terry gou, foxconn, the company began to produce plastic FM knob is black and white television.

in the early 1980 s, foxconn to expand our business to a personal computer assembly, and starting in the 90 s to the apple company supply some computer parts.

in the past 20 years, apple expanded cooperation with foxconn again to iPod, iPhone, and the product production, known under the name of foxconn, the company has become a generation by sales volume, the world’s largest electronic products for industry and commerce.

gou in the shareholders’ meeting, said he hoped for a new business model to test, this model combines wireless network software, hardware, and Taiwan, and then to expand the business to the world.

some of foxconn’s recent moves very striking, for example, the company launched Coverbank independent brand mobile phone accessories and bluetooth headset called Candyard. Many analysts guess if foxconn will eventually and their clients to compete in the field of smart phones and other devices.

foxconn has said that the company does not have to own brand products to enter the smartphone market plan.

the company is beginning to enter the smartphone related services. A person familiar with the matter, the company plans and India, and part of the local distributor of Indonesia partner to sell the blackberry.

according to sign a five-year partnership agreement by the end of 2013, foxconn has been responsible for the assembly of the blackberry, but also help the Canadian company to manage inventory.

at an unnamed officials, said the partnership allows foxconn unprecedented deeply involved in a global brand product sales and delivery forecast and other activities.

the blackberry spokesman declined to comment.

a person familiar with Mr. Gou idea of former foxconn executives, according to the company in the future also want to apply for licenses for its patent technology, as a way to improve income.

, people familiar with the matter said foxconn is biometric sensors for wearable devices for development of new technology. Gou said in October last year, foxconn has filed 300 patent applications for facial recognition technology.

according to the headquarters in Manhattan patent consulting company Envision IP statistics, foxconn in 2013 one of the top 20 in the United States patent owner of the list. The company once last year head wearing type display technology patents sold to Google, and price is unknown.

Envision, general manager of IP Maulin Shah said, foxconn may rely on patent license issuing and combined with manufacturing contract, obtain extra profits, many competitors may not have this kind of advantage.

foxconn declined to comment.

foxconn also launched an online platform, called “Kick2real” with zero cost will help entrepreneurs ideas into technical model. Company executives said that the company is also hope if product shape, foxconn to a piece of assembly production can be achieved.

gou admits, however, some new ideas may fail. But, he added, to learn from failure than buying a well-known enterprise has to be more cost-effective, the company always can adjust the new operation mode. (li Lin)

source: sina science and technology