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Hon Hai Courting New Customers as Apple Competition Swells

by Todd Haselton | May 28, 2013May 28, 2013 9:30 am PST

Hon Hai

Hon Hai (Foxconn) took a hit during the first quarter of this year when sales of Apple’s iPhone dropped off a bit compared to the first and fourth quarters of last year. At the time, it appeared that Hon Hai, a firm that manufacturers Apple’s products, was relying too much on the company. It turns out that’s actually the case and the company recently went on the record stating that it’s trying to court new customers in order to increase its profit margins, especially during slow quarters when Apple isn’t ramping up production of new products.

“As our production capacity has grown to such a large scale and existing major-brand customers offer limited order growth, we need to actively expand our client base to help increase our manufacturing volume,” one of the company’s executives told The Wall Street Journal recently. The company doesn’t purely rely on Apple, it also builds products for HP, Nokia and Sony, though a majority of its cash flow comes from the Cupertino-based company. Hon Hai has moved to cut costs in an effort to counteract slow quarters, such as Q1 2013 when it’s very likely that consumers are holding out for the next iPhone or ordering devices from competitors, such as Samsung.

Hon Hai also has another approach planned: creating its own accessories. The company is in talks to license Apple tech to develop its own line of accessories for the iPhone and iPad, The Wall Street Journal said. It’s also going to ramp up production of its own products, such as televisions that are sold through retailers like RadioShack in the U.S. In addition, the company is reportedly working on a tablet with Mozilla.

Todd Haselton

Todd Haselton has been writing professionally since 2006 during his undergraduate days at Lehigh University. He started out as an intern with...