Wed, Apr 15, 2009 - Page 11 News List

Foxconn planning to expand handset customer base

By Mark Lee  /  BLOOMBERG

Foxconn International Holdings Ltd (富士康控股), the world’s biggest contract maker of mobile phones, plans to expand its customer base to offset the loss of some business from Nokia Oyj, chairman Samuel Chin (陳偉良) said.

Nokia, the world’s biggest cellphone vendor, said last month it would manufacture more products itself as the global recession hits demand for handsets.

Nokia accounts for about half of Foxconn’s sales, Royal Bank of Scotland Group PLC said.

Nokia’s decision “will definitely impact the top line and the bottom line,” Chin said in Hong Kong yesterday. The plan by the Finnish company is not expected to be “long term” and may be reversed later this year, he said.

Foxconn, a unit of Hon Hai Precision Industry Co (鴻海精密), expects to derive 10 percent of its sales this year from handset companies outside the world’s top five, spokesman Vincent Tong (童文欣) said.

Nokia, Samsung Electronics, LG Electronics, Motorola and Sony Ericsson are the world’s biggest makers of mobile phones.

Foxconn last month reported its first loss since listing in 2005 after sales slumped. The market for mobile phones will remain “challenging this year,” Chin said.

Foxconn expects phone shipments to decline 9 percent to 1.09 billion handsets this year, Tong said, citing data from research company IDC.

Still, Foxconn has seen “signs of increased activity” in demand for more advanced phones, as well as lower-cost models, Chin said. The firm plans to cut capital spending this year to US$500 million from US$691 million last year, he said.

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