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Hon Hai will transform into technology services company

SHANGHAI -- Taiwan's Hon Hai Precision Industry Co., a main supplier of Apple Inc., is set to transform itself into a technology services company to meet consumer demand and has no intention of launching own-branded products.

Hon Hai, better known as Foxconn Technology Group, will provide total solutions from content creation to information management, cloud storage and data transmission, Chairman Terry Gou told reporters at the Global Device Summit, part of the Mobile Asia Expo in Shanghai.

Asked to comment on recent market rumors that Hon Hai plans to launch own-branded budget phones to take on China's popular handset maker Xiaomi Corp., Gou said his company “will not build its own brand as people have speculated” but will rather continue to manufacture products for customers based on demand.

He said Hon Hai has established multiple relationships with its customers, including a cloud server cooperation agreement signed in late April with U.S. PC vendor Hewlett Packard Co. (HP).

Under this partnership, Hon Hai will be responsible for product design and manufacturing, while HP will be in charge of sales and marketing, Gou explained.

In August 2013, U.S. projection equipment maker InFocus and FIH Mobile Ltd., a subsidiary of Hon Hai, jointly launched two smartphones in Taiwan with starting prices of NT$11,900 (US$396) and NT$13,900, respectively.

Hon Hai said it expects InFocus to become one of the top five smartphone brands in Taiwan within two years and one of the 10 best-selling brands in China within three, according to local media reports.

Hon Hai Calls for Creation of 'Smart Society'

Gou, The founder and chairman of Taiwan's Hon Hai Precision Industry Co., urged the establishment of a “smart society” that incorporates devices with services.

Addressing the Global Device Summit as part of the Mobile Asia Expo in Shanghai, Gou said people need a smart and connected society because devices alone cannot meet people's demands.

“Devices are terminals. Cloud computing, cloud storage and transmission through the Internet have to be integrated,” the executive said in his keynote presentation.

While noting that wearable devices will play an important role in areas such as health management, Gou also acknowledged that some current wearable devices have been unable to generate long-term customer engagement.

“The problem doesn't lie in the device per se, but the integration of the cloud network and the terminal. We need to have a bigger ecosystem,” he said.

Gou said this need for integration also extends into other markets, for example the automotive sector, in which a number of auto manufacturers and operators have initiatives intended to drive the adoption of smart vehicles.

Such propositions will not work without a supporting “smart city” initiative that can work across products and services from different parties, the chairman added.

According to industry body GSMA's Mobile Economy Asia Pacific 2014 report, the Asia-Pacific region accounted for half of the world's 3.4 billion mobile subscribers in 2013 and will remain one of the world's fastest-growing mobile markets through 2020 and beyond.

Most of the Asia Pacific mobile subscribers are concentrated in four major markets -- China, India, Japan and Indonesia, in order of size. Together, these account for 75 percent of the region's subscribers, and more than 30 percent of the global total, according to the GSMA report.

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