In the past few days, the media has been hyping Foxconn's bid for domestic 5G mobile phone orders, but they were rejected. The industry believes that without the support of Chinese mobile phones, Foxconn may accelerate its decline. Is this really the case?
1. The dispute between China Mobile and Foxconn
In the early years when Chinese mobile phones were just developing, they all needed Foxconn’s endorsement. After all, Foxconn has been OEMing for Apple for a long time and has established a reputation for high quality. Domestic mobile phones hope that Foxconn’s OEM can bring them a good quality reputation and open up the market. Therefore At that time, Chinese mobile phones liked to be manufactured by Foxconn.
However, with the development and growth of Chinese mobile phones, Chinese mobile phones now account for nearly 50% of the global mobile phone market. Chinese mobile phones already have enough brand appeal. In fact, they no longer have much demand for Foxconn. Domestic OEM Wingtech , BYD, Luxshare Precision, etc. are enough to meet the demand for Chinese mobile phones, and Foxconn’s orders from Chinese mobile phones are quite limited.
Three years ago, due to well-known reasons, a Chinese mobile phone company was restricted by the United States, resulting in a sharp decline in sales. Flextronics, Foxconn, etc. successively announced that they would stop OEM work for this Chinese mobile phone company. As a result, these OEMs had a bad relationship with Chinese mobile phones, and Flextronics was even more affected by this. With its withdrawal from the Chinese market, Foxconn also lost almost all orders for Chinese mobile phones.
Now that the Chinese mobile phone company is rising again, Foxconn has obviously realized that the sales of Chinese mobile phones have far exceeded expectations. Winning orders for Chinese mobile phones will help its development, so it has turned back to hope to gain the support of Chinese mobile phones. However, its betrayal has made China He hated mobile phones, so it was impossible to win his order.
2. Foxconn has considered India as a retreat
As the cost of manufacturing in China rises, Foxconn began to deploy manufacturing in India in 2019. Over the past few years, its number of employees in India has reached 17,000, and Apple is constantly encouraging Foxconn to OEM iPhone production in India.
Before 2021, Apple asked Foxconn to produce older iPhones in India. In 2022, Foxconn will produce iPhone 14 in India one month after the launch of iPhone 14. This year, iPhone 15 will be manufactured in China and India at the same time, showing that Apple is constantly strengthening manufacturing in India. , this year the proportion of iPhones made in India has reached 10%, and Foxconn’s revenue in India has exceeded 10 billion US dollars.
Foxconn also plans to participate in India's chip manufacturing project. India has proposed tens of billions of dollars in chip subsidies. Foxconn has jointly established a chip manufacturing plant with local Indian consortium Vedanta, hoping to obtain this part of the chip subsidy and also help Foxconn get rid of its over-reliance on mobile phone OEMs. In this low-end industry, due to the difficulty in obtaining authorization for chip manufacturing technology, the project was eventually terminated. However, it can also be seen that Foxconn pays more attention to India.
Now that the cooperation between Foxconn and Chinese mobile phones has been frustrated again, Foxconn may further increase its investment in India and even support local Indian mobile phone brands. India once produced a number of local brands such as micromax, but they were quickly defeated by Chinese mobile phones. Now with the development of manufacturing in India, India is expected to develop local mobile phone brands again, just like Chinese mobile phones did more than ten years ago, and rely on manufacturing in India. With its low-cost advantage, local Indian mobile phone brands are expected to copy the success of Chinese mobile phones. This is what Foxconn hopes to see.
Foxconn was completely to blame for being rejected by Chinese mobile phones. After all, it was too arrogant before, but it did not expect that Chinese mobile phones would be so tenacious and revive rapidly. Seeing that it had no hope of gaining support from Chinese mobile phones, Foxconn had already established a foothold in India. He will inevitably increase his investment in India, but this may not go as he wishes. India is not called the graveyard of foreign investment for a reason. Foxconn's peer Wistron has already failed in India - an Indian consortium forcibly acquired Wistron. Foxconn may also be worried about repeating the fate of Wistron in its Indian factory.