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Foxconn: satellites are a smart hedging strategy

Adding new industries beyond the company’s core consumer electronics activities will help margins

From Apple to SpaceX, Foxconn has a talent for spotting early what hot companies are up to.

The Taiwanese group, best known for assembling iPhones, has developed two experimental satellites with Taiwan’s National Central University, which were launched on a SpaceX rocket last month. The venture comes at the right time. Widening the scope of its contract manufacturing business beyond its core consumer electronics activities will help margins.

Foxconn has been one of Apple’s largest contract manufacturers, since it started assembling iMacs in 2000. iPhones have been a key revenue contributor: Foxconn manufactures 70 per cent of iPhones globally. But as global smartphone sales slow and rivals from Taiwan and China start chipping away at its market share, finding its next big thing is proving challenging. 

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