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Apple Inc. (AAPL): Foxconn Cutting Bait, or Prepping for Apple TV?

Apple Inc. (NASDAQ:AAPL) has made no bones about its relationship with Foxconn, the Asia-based tech manufacturer. Apple has worked closely with Foxconn to try to improve worker morale and workplace conditions in the various China factories, if for no other reason that because Apple’s products drive the majority of the revenue for Foxconn, though the company does manufacture of other companies. Apple is the cash cow, and Foxconn has been operating as if its life depends on Cupertino. And it many ways, it has.

Although Foxconn works with several U.S. tech companies, it does have an entire plant in China dedicated to making Apple devices – specifically the iPhone. Lately, though, there has been some new activity at some of the Foxconn plants in the midst of a couple of reports regarding Apple Inc. (NASDAQ:AAPL) and its plans for the future. Amidst reports that iPad and iPhone sales are down this year compared to this time last year, it seems that Foxconn may be slowing down its production and might need to look at new ways to generate some revenue in case Apple is losing its shine.

Apple Inc. (AAPL) to be Added to Several WisdomTree ETFsNow, juxtapose that with the ongoing rumors and whispers that Apple Inc. (NASDAQ:AAPL) may be preparing to launch an Apple TV service that could be a Netflix-Comcast, cable-streaming hybrid inside a large high-resolution screen, and that may signify to Foxconn that it needs to diversify its production lin to begin producing these television sets.

There seems to be no doubt coming out of Asia that Foxconn is beginning production of television sets – there is a report that the company has filled an order for 20,000 such televisions in Taiwan. So it seems that the question here is how Apple Inc. (NASDAQ:AAPL) fits into this production shift – is Foxconn reaching deals with other companies to produce TVs for them, diversifying its own manufacturing portfolio in the expectation of slumping sales of Apple devices? Or, is Foxconn doing some test production of TV sets to help produce the next big thing Apple known as Apple TV?

Not much can be judged right now; after all, Foxconn could be making these sets for other companies to prime its production line for Apple TV down the road. It is reported, though, that Foxconn has almost all of the components necessary to produce its own television set – with its own name rather than those of a partner.

What do you think? Is Foxconn moving away from Apple Inc. (NASDAQ:AAPL) reliance to diversify, or is it priming itself for an Apple TV launch and isn’t sliding off the Apple bandwagon? Give us your thoughts in the comments section below.


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