iPhone maker, Foxconn Technology Group, diversifies into the banking sector for providing loans to suppliers of electronic components in China. (Photo : Reuters)
The iPhone maker, Foxconn Technology Group, diversifies into the banking sector for providing loans to suppliers of electronic components in China.
According to a spokesman of the group, Foxconn has plans to repackage the existing loans, given in the past year, into financial products during the coming two years and selling them to investors directly.
According to reports, Foxconn has been deriving 50 percent of its revenue from Apple Inc. through assembly fees for iPhone, and now plans to expand its business in financial services, robotics, e-commerce and electronic component manufacturing, which has a higher margin of profits. Foxconn, the largest contract manufacturer of Apple Inc., joins Alibaba, Baidu and Tencent during its course of quietly venturing into lending services.
Foxconn, previously known as Hon Hai Precision Industry Co., is banking on its financial services for higher gain rather than only depending on Apple for their iPhone assembly. Reports say that Foxconn was earning only 1 percent of sticker price in iPhone assembly while financial services would give them higher returns.
Foxconn Technology Group hopes to do better than the financial institutions that are State owned, through serving consumers in their niche. There are reports that their online banking services can be affected by regulations on opening of bank accounts remotely, which means, Bank of Foxconn will be operating with limited liability in collecting deposits and conducting their banking services.
Foxconn also hopes to rope in other potential investors within the next year, in an effort to expand their network.
