Cocky Foxconn tells tech biz: We'll design your mobes, you do the ads The phone-making division of Foxconn swung into the black with a net profit of $75.1m (£47.5m) in 2011, according to its latest preliminary report to the Hong Kong Stock Exchange [PDF]. It also offered to take care of all the tough stuff in product design, leaving the marketing and branding to its tech titan clients. The …
Will their clients do once Foxconn decides they are no longer needed, and will happily offer to do the "product positioning, marketing, sales and distribution" as well?
Will they just be shell companies while Foxconn leases the brand names? That will only work until Foxconn pushes its own brand names (or just buys them out, which at that point they would be rich enough to do).
HTC made some judicious product design and interface / customer experience acquisitions before they had any kind of success competing against established manufacturers - their first offerings were underwhelming to say the least (c/f: http://www.microsoft.com/spain/windowsmobile/5/images/devices/Qtek_9000_large.jpg).
I think it's harder than Foxconn think to effectively compete in the volatile world of handset design, branding, and marketing.
Foxconn is positioned better the way things are. Right now the market has first of a kind, product segment competition. Foxconn sells many different products and some companies lose millions of dollars because theirs was less popular. Foxconn can avoid this expensive gamble of guessing where the market will go next and focus on their forte which is exploiting cheap labor to build things with higher value:cost ratio than elsewhere.
It's not long since HTC were just another contract manufacturer which exactly the same sales pitch (ie, outsource all your design and manufacture to us and you do the branding). A few years later and they've now got 6% smartphone market share under their own branding and are in the process of wiping their former customers out.
It's amazing what using slave labor can do for a company. What's even more amazing is people continue to buy the garbage.
Yes I have a cellphone and i'll be stuck buying them made with the blood sweat and tears of people making no money working in inhumane conditions at company's like foxxcon but hopefully one day the people will rise up.
That's all blood money.
Engineers only cause tensions in companies, because they have their own views on how things should be run. They claim they have an insight into the market because they claim they understand the technology and they claim technology matters.
Actually Apple is one of the first large companies to publicly get rid of huge parts of their engineering departments. They used to advertise their hardware design. They used to advertise the fact they had a different hardware architecture than PCs. Now it's all (nearly) the same. They have no special hardware any more. Engineering is way less important for Apple than it used to be.
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