Foxconn TV: Either Apple TV is all but here or Apple is sucking wind

Contract manufacturing giant Foxconn’s move into producing its own television sets either means that Apple TV will launch any minute now or that Apple is doomed.

It all depends on whether you’re a fan boy (or girl) reading fan girl (or boy) sites or one who believes that what goes up (as in a company’s fortunes) must come down.

Probably everybody is a little right. Don’t you hate it when everybody is a little right? Foxconn is most likely playing both sides of the Apple game, as the New York Times story above and this Apple Insider  post point out.

Turns out Foxconn (known as Hon Hai Precision) depends on Apple for 40 percent of  its revenue, according to the estimates of analysts the Times interviewed. Think eggs and basket.

The speculation is that Foxconn is getting a little uncomfortable having so much of its success ride on Apple’s iPad and iPhone, which has been losing market share to Samsung, as this Mercury News story explains.

So for Foxconn, the move into TV, however gingerly, is good business. And as the New York Times said:

“Good business is something Foxconn, one of the world’s largest contract electronics manufacturers, needs right now. Last month, Foxconn, also known as Hon Hai Precision Industry, reported that first-quarter revenue was dragged down 19.2 percent compared with the same period last year because of declining iPhone and iPad orders from its main customer, Apple.”

Apple fans see good news in all this TV-making. If Foxconn is churning out 60-inch televisions, think how easy it would be for them to suddenly switch to churning out 60-inch TVs for Apple.

Yes, an Apple TV – that product that won’t die, even though it’s never been born.

Apple, of course, has nothing to say about Foxconn’s moves. But Foxconn seems to be taking pains to reassure its customers, which besides Apple include a long list of the biggest consumer electronics companies in the world.

A Foxconn executive who talked to the Times explained that while Foxconn would be manufacturing its own TVs they would be marketed and branded by existing companies, such as Vizio and Radio Shack in China.

“Hon Hai is the largest electronic manufacturing service company in the world,” the Times quoted Kay Chiu, vice president of the consumer electronics division, as saying. “We are the platform for all the brand-name customers, and to have our own brand does not suit the company policy.”

That may be some comfort. On the other hand, consider the manufacturing expertise built up by Foxconn, which makes tablets, smartphones, laptops and you name it, for a host of companies. No question the company has the suppliers, supply chains, distribution networks and production expertise to enter any number of product markets.

The question is: Would that be a better business model than the one they’ve relied on for so many years. For now, Foxconn’s answer appears to be no.

 

Mike Cassidy Mike Cassidy (173 Posts)

I write about the culture of Silicon Valley for the San Jose Mercury News.