1) I think it is incredibly unlikely that Foxconn will sell Apple products in their retail stores, and even if they did, they certainly would not undercut Apple's prices.
2) This is even more bad news for electronics retailers hoping to expand into the Chinese market; obviously Foxconn already has an advantage because they've already been doing business there for over a decade. Then again, as you mention, electronics retail is a tricky business to begin with, so maybe this will only help discourage disastrous expansion.
Obviously, Best Buy's foray into China did not go as expected... they shut down all their Best Buy-branded stores there earlier this year and focused on expanding the domestic chain they acquired instead.
It seems we are assisting to many different approaches to the market. On one hand we have the new one from Foxconn (a physical mall to reach end users), on the other hand we have for example Dell ( virtual market to reach end users abroad using Internet). We could say Foxconn is a chipset producer (in principle), Dell is a vendor. First model, in line with Apple Store, brings the company close to people, second model could guarantee more saving: any channel (marketing, sales, post-sales support) is based on e-commerce rules. It is quite difficult to look for a general model which runs successfull worldwide. I didn't find it. Maybe region-by-region, it is better to think in terms of right trade-off to conceive, considering also different people/end users culture and habitude.
We have to encourage the price war between brands, then only able to slash the prices. Companies are fixing the prices not only on component basis; we are paying even for the brand name too. So price war can help the companies to fix the price at a lower justifiable level.
Is it likely Foxconn knows the cost better and hence can set their own prices?
I dont think Foxconn will set it own price, because if the it sets prices too less compared to existing market rates Apple would be forced to slash the prices.
"If Foxconn also builds and owns the storefronts through which it sells products, can anyone possibly beat that cost model?"
I dont think anyone can beat that model. Now Foxconn has started Mall-Building business, in future they might start online shopping business. I guess they will be in position to give tough competition to ebay and best buy.
That's very interesting. With the entire mall dedicated to IT and R&D, Foxconn is investing a lot of money to control the retail end of its business. If they succeed, they can be a force to reckon with.
From what I have read about Foxconn’s Cybermart mall projects is that the first location in Tapei will 12 floors as Barbara mentions, with most of the floors dedicated to the IT mall.What is even more interesting is that 3 floors are to be rented out to enterprise businesses for R&D purposes, like an entrepreneurial innovation zone.
This is an interesting model but it brings up several questions. Why would Foxcomm invest so much money in building its own Mall rather than lease a space in an existing mall, similar to Apple's model. Also, is Foxconn leasing out space in the mall its building or do they plan to utilize it strictly for the customers and products they support? Running a mall with all the added time and expense raises a question as to Foxconn's ultimate goal. Unless they just believe in widening their investments and having more control over the entire cycle, this may be a little too diversified.
This doesn’t surprise me and after thinking about it more, it kind of makes sense.After reading about Foxconn in the past about their campuses, which include schools (universities), supermarkets, food courts, game rooms, movie theaters, apartments, etc., they already seem to be in the real-estate business.With the mall business, they can provide additional services to their customers as well as receive more revenues on the actual sales of the products.Plus they will have an army of customers with their own employees, who will probably have incentives (discounts) to shop at the Cybermarts.
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
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Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Euro-Crisis: What It Means for High-Tech Firms Join EBN Editor in Chief Bolaji Ojo and Contributing Editor Jennifer Baljko on Thursday, July 12, at 10:00 a.m. EDT for a Live Chat on high-tech and Europe's economic difficulties.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
While no one really can accurately predict the future, we can take guidance from another Drucker saying which is the best way to predict the future is to create it.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.
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