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Hon Hai Teams With Mozilla in Bid to Diversify Away from Apple

27 May 2013

In an effort to become less dependent on one another, consumer electronics giant Apple Inc. and its largest manufacturing partner, Hon Hai Precision Industry Co., continue to diversify. Apple reportedly is farming out more of its assembly business to other manufacturing services providers and Hon Hai, also known as Foxconn, has announced it is teaming up with Mozilla to launch a mobile device that runs on the U.S. company's Firefox operating system, Reuters reported.

Most of the mobile devices that Hon Hai manufactures run on Apple's iOS and Google's Android systems. To diversify its client base, Hon Hai said it would add Firefox to its product line. Hon Hai draws an estimated 60 percent of its revenue from assembling iPads and iPhones. Like other suppliers to Apple, Hon Hai has seen its net profits decline recently as demand for Apple products has slowed.

“Hon Hai has been quite vocal about reducing their dependence on Apple,” said Thomas Dinges, Senior Principal Analyst, Outsourced Manufacturing Intelligence Service, IHS.

Apple, in the meantime, reportedly is shifting more of its business toward EMS provider Pegatron Corp. Pegatron has been Apple's number two for more than a year, according to Dinges.

“Pegatron is the primary assembler on the iPhone 4s and the iPad Mini,” said Dinges. “So from a revenue standpoint, they have good products to be involved with. Also, none of the other folks have interest in much of the Apple assembly business because there isn't much lift to margins.”

Mozilla is a non-profit organization that evolved from Netscape.



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