The biggest and most important client of Taiwanese manufacturing giant Foxconn is Apple, and its ability to manufacture the iPhone and iPad has made it indispensable to the California company. As Apple’s fortunes have risen, so have Foxconn’s. But according to the New York Times, as Apple’s growth has slowed a bit, Foxconn has begun planning for a future “far, far beyond Apple.”
Time for Apple investors to panic? Not quite.
Foxconn, the story says, “wants to reduce its reliance on Apple. Its new strategy is a shift away from making products that other companies design, and toward developing products of its own, with an especially aggressive push into designing and manufacturing large, flat-screen televisions.” The idea is that Foxconn would be its own brand, not just the maker of products behind others’ brands. To do that, it’s invested in Sharp’s flat panel display factory and partnered with RadioShack (in China) and Vizio to sell its TVs.
But reading further, it becomes clear that it’s not quite that Foxconn is looking for ways to reduce its dependence on Apple; it’s really looking for ways to rely less on the iPhone.
The analysts quoted in the story believe that what Foxconn is up to by improving its ability to manufacture TVs quickly and cheaply is anticipating a move Apple may make. From the article:
Analysts say Mr. Gou’s efforts to buy an LCD factory and vertically integrate his television manufacturing represent anticipation that orders for an Apple television product will come his way.
In other words, Foxconn wants to produce the long-rumored Apple TV. That’s not a bad idea either: one day Apple is going to have to move past the iPhone too, or at least augment its hardware lineup in other ways. That may include wearable computing devices, a TV or something else entirely. Either way, Foxconn wants to be ready for whatever that next move is.
So Foxconn doesn’t actually appear to be looking to extricate itself from Apple; rather it’s looking to extend its relationship with the company further into the future.