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Rumor: Foxconn to end its retail sales

Posted on Thursday, March 26 2009 @ 11:36:08 CET by

Bright Side of News speculates Foxconn will soon quit its retail business. The site reports those rumors from last year that electronics manufacturing giant Foxconn will be acquiring ASUS' Pegatron manufacturing division are true, but that one of the conditions is that Foxconn will need to close its retail business. A quarter ago Foxconn wasn't willing to do this just yet, but the report indicates the recession and the drop in demand for computers has accelerated the move. Foxconn will reportedly acquire Pegatron by June, and close its Channel unit.
Although this is a rumor as of right now, something that might pop up to confirm this would be an announcement that Foxconn is buying Pegatron. Be on the lookout for this type of announcement to corroborate the Foxconn Chanel closure. With this closure, the way for an acquisition of Pegatron Technologies is wide open. This would not only give Foxconn increased manufacturing capacity but also the clients and contacts already held by Pegatron. ASUS would get rid of a competitor as well as receive some extra funds. ASUS has long been working on establishing channel dominance and at the time of this writing, the company is making a tremendous amount of retail products in addition to its component sales. It looks like this would be a win-win situation for both companies and would allow them even greater penetration into the worldwide markets without the increased cost, as it would divide the market between them: ASUS takes the role as a Global Brand and Foxconn as a Global OEM. Once completed, ASUS can go head to head with the big players in the US like Dell, HP and IBM, while at the same time Foxconn is the company that will manufacture most of components for the brands mentioned above.



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