Foxconn is becoming Freddy Kruger

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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