Bank of Foxconn: iPhone assembler makes push into China financial services

“Foxconn Technology Group doesn’t want just to make iPhones,” Eva Dou and Gillian Wong report for The Wall Street Journal. “It also wants to be the banker for the world’s electronics supply chain.”

“Apple Inc.’s largest contract electronics manufacturer has quietly set up half a dozen financial services companies in China over the past year that have begun providing loans and other financing to electronics component suppliers,” Dou and Wong report. “Foxconn, formally known as Hon Hai Precision Industry Co., aims to begin repackaging the loans into financial products within a couple of years and sell them directly to investors, said Jack Lee, managing director of the business unit, Foxconn Financial Service Platform, which has offices in Beijing and Shanghai.”

“Electronics contract manufacturing is a brutally low-margin business, with assembly fees making up less than 1% of the sticker price of an iPhone, which costs more than $800 in China, according to analysts,” Dou and Wong report. “Foxconn derives around half its revenue from Apple, but the company is trying to expand into more higher-margin businesses including component manufacturing, e-commerce, robotics and financial services.”

Read more in the full article here.

MacDailyNews Take: It’s good for Hon Hai, which is currently heavily dependent on Apple, to have some insurance policies and back up plans.

[Thanks to MacDailyNews Reader “Dan K.” for the heads up.]

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