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Foxconn is becoming Freddy Kruger

Scaring the willies out of OEMs
Fri Apr 30 2010, 10:41

CHINESE ELECTRONICS ASSEMBLER Foxconn's moves to become an original design manufacturer (ODM) are worrying other PC companies.

The outfit has always been a contract manufacturer for PC brands, so its recent moves to become an ODM and build it's own designs gives it pricing leverage.

This scares its former customers who are seeing it rapidly eat into their markets.

Compal Electronics president Ray Chen moaned to Digitimes that Foxconn entry into the notebook manufacturing business has already had some effect on the industry.

He expects Foxconn to have a chance of gaining 8 to 10 per cent of global notebook ODM/OEM orders in 2011 with a shipment volume of more than 20 million units.

Beancounters think that Foxconn will ship 5 to 10 million notebooks in 2010, and if the company is able to double the volume in 2011, it will have a chance to advance to become one of the global top-four notebook makers.

Recently Quanta Computer and Compal have been forced to flog their gear at a margin of 4.1 per cent. But Chen believes price competition will not last forever and after brand vendors settle their order distribution plans for 2010-2011 the competition for market share should subside. µ

 

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Comments
Yo right

Im feelin you homes. Nothing gets me going like a muddafkin beef hoikken noodles meal.

posted by : Briggs, 04 May 2010 Complain about this comment
You're Right

You're totally right bro, but dZamn, their cousins at the little Chinese restaurant down the street from my house make some bangin' General Tso's Chicken and a mean beef and broccoli too!

posted by : RobinPanties, 04 May 2010 Complain about this comment
DeadSoul

You are of course corrent, and I've been stating as much for the last 10-15 years.

This has been the Chinese Master Plan all along. 1) Learn how to do something someone else is doing by sending students abroad, 2) set up partnerships with large businesses to start doing what they are doing, 3) operate Chinese wing at substancially reduced rate by paying low wages and not conforming to same safety and environmental and workplace rules, 4) through undercutting other manufacturing wings, assume the role of prime (and only) manufacturer, 5) offer to manage distribution and logistics for corporate parent, 6) offer substancially cheaper design talent, educated abroad, to corporate parent, 7) offer to manage entire business for corporate parent, 8) cut off the head of worthless corporate parent and reach directly to distributers and customers, 9) force nonChinese talent pool to rot and decay as no manufacturing can be done on parity with cost and quality of Chinese goods, 10) All your money belong to me (Chinese).

Easy peasy.

posted by : Crapular, 01 May 2010 Complain about this comment
Out Sauce

Well out sauce everything!!!.. See what happens!!! If you are company Y and you get company X to make something for you, what stops company X from just selling stuff to consumers??? NOTHING.. except patents

posted by : DeadSoul, 30 April 2010 Complain about this comment
Agreed - Bring industry back home

We are now beginning to reap the fruits of our corporations that have shipped production (and all the support industries they need) overseas.

posted by : Me, 30 April 2010 Complain about this comment
Foxconn has had motherboards

I don't think it's any big deal. Foxconn has sold it's own name brand before. Maybe it will help the customer in the end in getting more for your money from the big guys.
Hp or Dell or Acer won't go out of business.

posted by : Scott, 30 April 2010 Complain about this comment
Bring jobs home

This is a good opportunity to have OEMs start having local board manufacturing facilities have more work. If Foxcon wants to bite the hands that feeds them, then they can deal with the consequences.

posted by : Vinster, 30 April 2010 Complain about this comment
are you sure?

it's own ???

posted by : reader, 30 April 2010 Complain about this comment
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