With a lack of new product announcements so far this year from Apple, its manufacturing partner, Foxconn, is beginning to feel it. According to some recently released numbers, sales are down this year so far 12.6%, causing it to rethink its reliance on Apple. Last year, out of Foxconn’s total $100 billion revenue, Apple accounted for an astounding 60%. According to the report from Reuters, Hon Hai, the parent company of Foxconn, is looking to do more R&D to help its own business:
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.
Overall, the latter part of the year should pick up the “slack” that Apple has had in not releasing new devices. There are a few different things expected to come during this time, including a new iPhone 5S, cheaper iPhone, a new iPad mini and possibly an iPad 5. These devices will most likely give Foxconn the usual bump it is used to getting from Apple, as usually they come when new devices are released.
What do you think? Believe it is because no major new devices have been announced? Wondering what there is to come? Let us know in the comments, or tweet me @TiP_Kyle.