Taiwanese electronics manufacturer Foxconn wants to go from Apple (AAPL) supplier to Apple competitor. According to various sources, the company has teamed up with Mozilla, the California-based nonprofit organization best known for its Firefox operating system, to build a new tablet device. The product will officially debut next Monday, June 3, to the public.
Foxconn, also known as Hon Hai Precision Industry, has been plagued with reports of poor working conditions, employee suicides and industrial accidents at its Chinese facilities. Apple, Hewlett-Packard (HPQ), Sony (SNE) and Nokia (NOK) and other major tech companies have outsourced their products to Foxconn over the years and Foxconn’s profitability is closely tied to the success of the products it manufactures.
According to The Wall Street Journal, Foxconn’s contracts with Apple account for 50% of the company’s profits. Foxconn reported a 19.2% dip in first-quarter revenue because of weaker iPhone demand.
Foxconn’s entrepreneurial ambitions started before its partnership with Mozilla. The company has already spent resources to design and build flat-screen TVs. Its decision to directly compete with the companies that made it a global player in the electronics sphere should not come as a surprise, says The Daily Ticker’s Henry Blodget.
“It seems inevitable that Foxconn and other companies are going to be making and competing directly with Apple,” Blodget says in the accompanying clip.
If the rumors are true that Foxconn and Mozilla are about to enter the crowded tablet market, the two companies will have to work hard to convince fickle consumers to buy their tablet. A new report by global market intelligence firm IDC found that Apple controlled 39.6% of the tablet market last quarter compared to 17.9% for Samsung, 3.7% for Amazon and 1.8% for Microsoft (MSFT).
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