Acer to release Foxconn-made Google Android phone Q1 '10

Foxconn, a subsidiary of Hon Hai Precision Industry Co., will join Compal Communications Inc. as a manufacturer of Acer's Android handsets, Jim Wong, Acer President of IT Products division said in an interview yesterday. Inventec Appliances Corp. supplies the Taipei-based company's Microsoft Corp. Windows-based phones, he said.

“Hon Hai has very highly integrated mechanical parts, and on a smartphone, if you want to make it very small and compact, the mechanical parts are very important,” Wong said. The device is the first Acer product to be outsourced to Shenzhen-based Foxconn, he said.

Acer, which overtook Dell Inc. as the world's second largest computer vendor in the third quarter, plans to release five smartphones this year and expects Android based models will account for a growing share of its handset sales. Foxconn, whose clients include Motorola Inc. and Nokia Oyj, posted a net loss in the six-months to June 30 after sales dropped 34 percent.

“This order proves that Foxconn is still a leader in handset manufacturing,” said Lu Chia-lin, a Taipei-based analyst at Macquarie Group Ltd. who rates Foxconn “under perform.” “Android will be very important to the handset makers.”

Lu's recommendations on the stock have returned 176 percent the past year, the most among 15 analysts, according to Bloomberg data.

Acer lost 5.3 percent to close at NT$91.40 in Taipei.

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