A report suggests that Foxconn is readying its factories for a major push into television manufacture, in an effort to be less reliant on Apple. There is also some speculation that by growing its influence in television manufacture, Foxconn may be attempting to make its assembly lines attractive for Apple as it begins to work on its rumoured television.
According to New York Times report, Foxconn wishes to diversify its business so that it is less reliant on Apple, which is estimated to contribute to 40% of Foxconn's revenue.
Gartner analyst Jamie Wang said: "Foxconn senses that the Apple aura isn’t as invincible as before. So they [Foxconn] are worried that they need something besides Apple’s business that will allow them to grow."
"Its new strategy is a shift away from making products that other companies design, and toward developing products of its own," writes The New York Times (NYT).
Among its plans to diversify and tap into other markets is a desire to push into the television business. Foxconn already has a number of TV assembly clients, including Sony, Sharp and Toshiba. In addition, last year Foxconn spent around $840 million when it joined forces with Sharp to purchase Sharp's LCD panel factory in Sakai, Japan.
Following that purchase, Foxconn produced a 60in TV for the Taiwan market. Only 20,000 of these have been sold, according to Foxconn spokesman Simon Hsing.
NYT notes that Foxconn is in a difficult position because it isn't in its interest to compete with its clients, and yet it needs to "absorb excess LCD panels produced by the Sakai factory to take advantage of the lower manufacturing cost per unit." This probably means it is selling at a loss in order to benefit from other savings.
Most analysts believe Foxconn needs a larger TV customer, notes NYT, and not surprisingly, they have Apple in mind. "Some analysts think Foxconn is just biding its time, waiting for Apple to figure how to create a game-changing television product that will increase demand once again."
It may be that Foxconn is making sure that they know TV better than anyone else in the world in the hope that will appeal to Apple.