Hon Hai in Talks to Make Smartphones for Photo-App Developer

By Lorraine Luk 

TAIPEI-- Hon Hai Precision Industry Co. is in talks to make smartphones for a Chinese photo-editing application developer, as the key assembler of Apple Inc. products seeks to broaden its customer base.

Terry Gou, chairman of Hon Hai, also known as Foxconn Technology Group, told shareholders at an annual meeting Wednesday that discussions are under way with Xiamen Meitu Technology Co. Ltd. The Chinese company has developed an application popular among China's selfie-takers called "Meitu," which means "beautiful pictures" in Chinese.

Meitu has launched two Android-based smartphones with another hardware maker in China since 2013. Both models, which come preinstalled with Meitu's photo-oriented apps, sell for about 2,000 Chinese yuan (US$325).

"We have also helped a client to make a smartphone designed for e-commerce," Mr. Gou said, declining to name the client. "Many Internet companies have asked Foxconn to help them make their own hardware devices," he said.

Internet companies are keen on developing their own devices with preinstalled software in a bid to attract more users to their services. Amazon.com Inc. recently launched a smartphone with three-dimensional displays linked to its online shopping platform. People familiar with the matter said Hon Hai is assembling the device.

As revenue from PCs and phone manufacturing slows, Hon Hai is expanding its customer base and diversifying its business lines. Hon Hai's revenue growth was just 1% last year, compared with a 53% increase in 2010 when Apple's first iPad launched.

Such breadth is more important now that Apple has outsourced some of its iPhone and iPad production to Hon Hai's smaller Taiwanese rivals including Compal Electronics Inc. and Wistron Corp., according to people familiar with the matter.

As it seeks new sources of growth, Mr. Gou said Wednesday the company is also developing new technologies for wearable devices.

Write to Lorraine Luk at [e-mail]

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