iPhone manufacturer Foxconn is buying Belkin, Linksys and Wemo
Foxconn is best known for doing the heavy lifting involved in building your iPhone, but the Taiwanese company is about to take a big step into the unknown. The firm has announced it is to acquire computer accessories company Belkin, and its subsidiaries Linksys and Wemo for $866 million in cash.
You’ll likely have encountered at least two of those brands. Belkin is well known for making cases, laptop docks and chargers, while Linksys is best known for its range of home routers. Wemo, on the other hand, specialises in smart home equipment.
For Foxconn, a company known for working behind the scenes on other brands’ products, that’s quite a change – and suddenly puts it in direct competition with the likes of Nest and Amazon in the smart home space.
But perhaps that’s getting a little bit ahead of ourselves – as Belkin is a Californian company, the move needs to be approved by the US Committee on Foreign Investment. In normal times this would seem like a done deal, but we don’t live in normal times: just this month, President Trump blocked Broadcom’s bid for Qualcomm due to fears of compromising national security from China. If you’re thinking “yes, but Foxconn isn’t Chinese,” – well yes, but Broadcom is based in Singapore and that didn’t stop that buyout getting nixed.
Will the same happen with this deal? Well, given Linksys is best known for networking equipment, you can’t rule it out – though you’d imagine Foxconn’s pledge to create 13,000 jobs with a new factory in Wisconsin might sweeten the deal somewhat, as it’s something the president points to as a major personal success, however dubiously. Assuming the deal does go ahead, it will certainly help Foxconn reduce its reliance on the iPhone. Currently, around half of the company’s business comes from Apple, which is a gamble that’s paid off to date but might not forever. The company has already, after all, reportedly seen iPhone X orders halved. Selling directly to consumers will undoubtedly come with its own challenges, but it’s potentially less risky than sticking to its comfort zone.