Hon Hai Poised to Tap Smartphone Market

Taiwan-based Hon Hai Precision Industry Co Ltd, a globally leading EMS (electronics manufacturing service) provider, has moved to develop Android-based smartphones, in a bid to tap the market to recover its sagging handset shipments, according to Terry Guo, Chairman of the firm.

Experienced in supplying Apple Computer Inc the hot-selling iPhone, Hon Hai is capable of manufacturing smartphones and recently determined to utilize the experience to independently develop such products based on Google`s Android platform. Although having no intention to compete in the smartphone markets under its own brand, Hon Hai, with world-caliber production and R&D capability, is still likely to threaten another Taiwanese leading smartphone supplier High Tech Computer Corporation (HTC) in the ODM (original design manufacturing) sector.

Noteworthy is that, institutional investors indicated, Hon Hai is presumably going to venture into Android-based smartphones as a production and R&D arm for its major handset client Motorola, whose CEO Sanjay Jha has recently announced a plan to concentrate on sales of such smartphones this year.

In fact, Android-based smartphones have become one of the most stellar products, attracting a number of handset suppliers, including Asustek Computer Inc, Acer Inc and Compal Communications Corp, to focus on development and promotion of such products as their sales boosters amid the global financial tsunami this year.

On the other hand, institutional investors stated, the recent shrinking shipments of feature phones and lackluster profit performance also prompt Hon Hai to seek profitable products to recover its business operations. Last year, Foxconn International Holdings, affiliated with Hon Hai Group, saw its net profit regress annually by 83 percent to only NT$121 million.

Source: CENS