FoxconnAs the world's largestElectronicsThe assembly enterprise has been able to develop and grow rapidly, mainly because it has achievedApplesof a large numberiphoneassembly orders, and enjoy a variety of preferential policies provided by the mainland. FoxconnAfter the establishment of factories in the mainland, it quickly became the world's leading companyElectronicsassembly business, and make a lot of money.
However,FoxconnThe founderTerry GouInFoxconnAfter growing stronger, he began to have some self-satisfaction, and he willFoxconnThe success is attributed to:Apples, and even bluntly said that the construction of the factory is the reward given to them by the mainland. In addition, due to the friction and technological blockade between China and the United States,FoxconnIt is also actively considering the transfer of production capacity outward to reduce the pairsApplesdependency. However, this decision letsFoxconnCaught in a situation where there is no turning back.
ApplesAs the world's leading smartphone manufacturer, it is mainly responsible for product design, sales andChain management。The accessories of the products come from the best manufacturers all over the world, and the assembly of the products is handed overFoxconn, Pegatron and other enterprises are responsible. According to statistics,ApplesMore than 95% of the products are produced in Chinese mainland.
However, withChinese enterprisesHuaweiWith the rapid rise of 5G technology, the United States has begun to rightHuaweiImpose sanctions. Affected by sanctions,ApplesIt has also begun to seek the possibility of establishing a foreign industrial chain. India, as a country with a fast-growing population, relatively low labor costs, and a growing market potential, has becomeApplesAn important goal of the transfer industry chain. ApplesCEO TimCookRepresentation,ApplesEfforts will be stepped up in India.
FoxconnBe responsiveApplesThe decision to move out,InvestmentsAn assembly plant was established in India and a joint venture was established with Vedanta in IndiaChipsFactory. However,Foxconnin IndiaInvestmentsencountered a series of problems, including poor quality of local staff and imperfect supporting facilities. causedFoxconnNot only did it not make money, but it lost a lot of money, and the factory stopped production many times. At the same time,FoxconnInvestmentsof IndianiphoneIt was also returned in the European marketApplesBlame it onFoxconn。This makes:FoxconnOriginally hoped to pass the cooperationApplesPlans to move out to get more orders have been frustrated.
InAppleswilliphone15% of 27% of the order is distributedLuxshare Precisionand other competitorsFoxconnCaught in an embarrassing dilemma. FoxconnI had hoped to continue to rely on itApplesto expand the business and strengthen the relationship by relocating. However,Applesbut chose to weakenFoxconnstatus, further challengedFoxconnmarket position.
It's inFoxconnWhile hesitating about what to choose, the Indian side officially announced its decision and to:FoxconnThe CEO awarded the Order of the Lotus of the Second Class. This shows that India wants to stayFoxconn, and actively withFoxconnCooperation, inChipsfield to jointly establish joint ventures. FoxconnI feel recognized by India and believe that there is great potential in the Indian market. Therefore,FoxconnThe company has decided to continue to add additional plants to its plant in IndiaInvestmentsto expand the localiphoneAssembly capacity, which is equivalent to transferring production capacity from the mainland to India.
FoxconnThe company plans to transfer $300 billion worth of production capacity to India over the next three years. However, this behavior letsFoxconnThe image in the mainland market has been seriously damaged. FoxconnThe scale of employees has plummeted, the market value has also fallen below 300 billion, and the revenue in the first quarter of this year has fallen by 20% year-on-year9%。At the same time,Luxshare Precision, BYD and other continentsOEMThe rapid rise of enterprises,FoxconnIt is gradually being replaced by other enterprises.
Foreign media said bluntly,FoxconnThere's no going back. Due to the active relocation has lost the trust of the marketLuxshare Precision, BYD and other mainland enterprises are more favored. FoxconnOriginally hoped to re-andApplescooperation, but the opportunity is no longer there. In addition,ApplesIt also announced that it would withdraw from the car-building project it had worked on for ten years, and would have pinned its hopes on itAutomotive industryChain breakage.
FoxconnOnce hoped to passOEMApplesofCarsto expand the business, but due toElectric vehiclesMost of the core components in the field are:Chinese enterprisesControl,ApplesEventually opted out. ForFoxconnsaid that this decision letTerry GouUnexpectedly, the money invested was almost lost, and there was no going back.
Foxconnis a globally renownedElectronicsassembly enterprises, once relied onOEMApplesThe product has embarked on the road of rapid development. However, due toFoxconnToo dependentApples, and encountered a series of problems when relocating, and its market position was gradually replaced by other mainland enterprises.
FoxconnBe responsiveApples's relocation plan,InvestmentsThe company built a factory in India and expanded its production capacity, but encountered problems such as low quality of employees and incomplete supporting facilities. Foxconnin IndiaInvestmentsHigh costs and quality issues led to orders being transferred back to Chinese mainland to be fulfilled. At the same time, Indian-madeiphoneIt also faced the problem of returns in the European marketApplesBlame it onFoxconn
FoxconnThe image of the Chinese mainland market has been severely damaged, and the size of the workforce and market value have also declined. At the same time, Chinese mainlandOEMBusinesses such as:Luxshare Precisionand BYD's rapid rise,Foxconnis at risk of being replaced.
FoxconnWant to re-connect withApplesCooperation, butApplesThe order has been distributed to another company and announced its withdrawalCarsproject, makeFoxconnHopes are dashed. FoxconnIt was intended to passOEMApplesofCarsto explore new areas of business, but were eventually defeated by reality.
In this case, we can see the risks that can arise from relying too heavily on one customer. FoxconnToo dependentApples, causing it to be in theAppleswas in a passive position in the decision to move out, and eventually lost the trust of the market. This case is also a reminder that companies should seek to diversify their partners and business areas to reduce risk and remain sustainable.