It’s been a stagnant year so far for new Apple product announcements, and Foxconn, Apple’s biggest manufacturing partner, is starting to feel the pitch: sales are down 12.6 this year, against a target of 15% growth. And in response, Foxconn’s looking to become a lot less dependent upon Apple, who generated 60 percent of the company’s 2012 $100 billion in revenues.
As Apple’s growth slows in the face of fierce competition from Samsung Electronics Co Ltd, Hon Hai has been keen to diversify into higher-margin businesses, but its slew of initiatives has opened it up to criticism that it lacks focus.
To help it develop those businesses it is planning to hire between 5,000 and 10,000 engineers across Taiwan, adding to the 6,000 currently on the island, Chairman Terry Gou told the company’s annual shareholder meeting.
Focal points will be research and development, software and patent rights, he said, adding that Hon Hai ranks No.8 globally among companies in terms of the amount of patents it holds.
In other words, Foxconn and its parent company Hon Hai are looking to hedge their bets and start not just manufacturing technology, but specializing in creating it and licensing it to others.
A slate of new Apple products, of course, are set to be released by the end of the year, the iPhone 5S, a budget iPhone, the iPad 5 and iPad mini 2 among them. But can even these products convert Foxconn’s earnings shortage into their forecast 15% growth? It’s been a transition year for Apple, but that transition is about to come to an end.
- Source Reuters