Jordan O'BrienFoxconn is pretty keen on expanding its remit away from just being known as the company that builds the iPhone. In 2016, it announced the acquisition of electronics manufacturer Sharp, while now it has announced that it has bought Belkin.
Acquiring Belkin is a good way to diversify business, as it’s known for a whole raft of things. It makes networking products through its Linksys brand, accessories for the iPhone and other gadgets as Belkin, and even smart home products under the WeMo moniker.
WeMo is as consumer-friendly as smart home brands come, but it’s already gained quite a bit of traction. Both Amazon and Google worked with WeMo to bolster the smart home prowess of their digital assistants, while the company also offers HomeKit bridge to offer Siri smart control of countless products. It’s not just the plug and play market WeMo is interested in, however. It’s WeMo Maker kit allows tinkerers to add smart control to just about any product.
Foxconn is desperate to change consumer’s perceptions of the business, although it’s not all about appearances. The company is reported to be almost fully reliant on Apple, with half of all of its business tied to products like the iPhone. That means it’s vulnerable if anything happened to the iPhone’s popularity, or if Apple chose to move its manufacturing to a different company. By investing in the smart home market, Foxconn is hoping to sell directly to consumers, allowing it to be less reliant on the whims of other companies.
The Opportunity To Network
While Belkin’s smart home division will be an important addition for Foxconn, the OEM will also receive the Linksys division. Belkin initially acquired Linksys from Cisco back in 2013, and it’s a pretty big name in the networking industry. While it isn’t responsible for much of the networking hardware in large installations, its products have become a mainstay in the homes of millions of consumers, and in the offices of small businesses around the world.
Linksys has had a pretty consistent history since Belkin acquired it from Cisco. It has continued down the path of offering a wide range of networking solutions, such as routers, range extenders, and access points. The company has also been a driving force in the explosive growth of mesh Wi-Fi systems, which have been popular over the last couple of years.
Foxconn hasn’t outlined its plans for Linksys, but it’s likely to be business as usual. That’s likely to be the policy across the board, whether it’s iPhone cables or smart home gadgets. It will need deep pockets in order to get in front of the consumer, however. Although Foxconn has already proved that it has enough cash. It dropped $3.5bn to take over Sharp, meaning Belkin seems relatively affordable in comparison. Foxconn has offered to pay $866m in cash to absorb the firm, although it will need to be approved by the US Committee on Foreign Investment.
It’s likely that Foxconn will be successful in its bid for Belkin, but it isn’t a done deal yet. President Trump has made it known to the world that he’s willing to protect American companies no matter the cost, and even made the decision to block Broadcom’s acquisition attempt of Qualcomm. The reasoning behind that was to protect national security from China, despite Broadcom being based in both California and Singapore – neither of which are China. In fact, given Trump’s inadequate geography skills, Foxconn’s location in the Republic of China (known as Taiwan) will likely be a bigger issue.