标签: foxconn

The phenomenal popularity of media tablets such as Apple Inc.'s iPad means big business to contract manufacturers based in Asia. Such companies build nearly nine out of every 10 tablets sold—a percentage that is expected to increase, according to a new report. Outsourced manufacturers were responsible for 87.5 percent of tablet production in 2011, according to a global manufacturing and design report by market research firm IHS iSuppli. That number is expected to grow to 89.2 percent this year, with only 10.8 percent of tablets built in-house by branded electronics companies, according to the report. While consumers flock to tablets carrying the logos of the likes of Apple and Amazon, not all realize that the devices are built on a contract basis by the likes of Hon Hai Precision Industry Co. Ltd.—which does business under the trade name Foxconn—Quanta Computer Inc. and others, IHS said. "The high percentage of outsourced manufacturing of tablets reflects the choice among tablet brands and original equipment manufacturers—even ones as big as Apple—to refrain from in-house production," said Jeffrey Wu, senior analyst for OEM at IHS, in a statement.   According to Wu, there are several reasons companies like Apple and Amazon choose the outsource the building of their tablets, including faster time to market, leveraging of capabilities for firmware development and hardware integration, and flexibility that translates into lower expenses and reduced headcount. IHS projects that the percentage of tablets built by contract manufacturers will grow to 91.1 percent by 2015, before sliding back to 90.4 percent in 2016. Foxconn vs. ODMs Foxconn is by far the biggest beneficiary of this trend. According to IHS, the firm—which builds iPads—accounted for 62 percent of tablet shipments last year. According to IHS, Foxconn also holds a unique position in the tablet market because of its close relationship with Apple. Foxconn holds the right to produce the iPad, leaving original design manufacturers (ODMs) it competes with to scramble for leftovers in the tablet market. But IHS believes that ODMs have a better change of breaking Foxconn's grip on the market, thanks to the emergence of Android-based tablets and the anticipated appearance of Windows-based tablets. IHS projects that ODMs could grow their share of the tablet outsourcing market to as much as 53 percent by 2016, assuming consumers embrace iPad alternatives. Most ODMs make notebook PCs as well. Choosing to produce tablets for other clients could mean endangering their own stake in the PC market, much as tablets are now eating into the share traditionally enjoyed by notebook computers among consumers, IHS said. But strengthening their foothold in the tablet space is inevitable for ODMs, especially as tablets continue to gain momentum at the expense of notebook computers, according to the firm.   IHS warned that even Foxconn is not entirely worry free. If Apple decided to shift some of its iPad production to other contract manufacturers in an effort to diversity, Foxconn could suffer a blow, the firm said. Firms that do their tablet production in-house—such as Samsung and Motorola—are expected to fight it out over a stagnant-sized pie. Their share of tablet manufacturing is not expected to exceed the 12.5 percent they saw, cumulatively, in 2011, IHS said. The firm predicts that in-house manufactured tablets will amount to about 9 to 10 percent of total tablets manufactured going forward, as ODMs and EMS providers duke it out for a bigger stake in the hotly contested tablet market.