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| Why does the iPhone maker now want to make electric vehicles? |
Due to the new era of the cold war between the US and China, iPhone maker Focuson is now planning to make electric vehicles.
The company's chairman, Ying Liu, told the BBC in an interview what the future might look like for many Taiwanese companies.
Amid rising tensions between the US and China, Ying Liu says Focus Con has to prepare for the worst.
"We hope that the leaders of both countries will keep peace and stability in mind," Ying Liu, 67, said from his office in Taiwan's capital.
"But as an entrepreneur, I have to think about what happens if the worst happens."
One of the scenarios he is hinting at is that China tries to block access to Taiwan, which China claims is part of it, or invades the island.
Planning to continue the business has already begun, says Young Liu. He said that the production of many goods related to national security has been transferred from China to Mexico and Vietnam.
He was probably referring to the servers used in data centers to store sensitive information.
Focus Con or Hon Hai Technology Group was formed in 1974 and initially made small components used in the manufacture of TVs. Now it is one of the most powerful technology companies in the world, earning up to two hundred billion dollars annually.
It is currently best known for producing more than half of the iPhone products, but major companies such as Microsoft, Sony, Dell, and Amazon are also clients of Focus Cone.
For decades the company operated under a perfect formula. They would design products in America and sell them to the world after manufacturing them in China. That's how they went from being a small component manufacturing company to becoming a big name in the world of electronics and technology.
But after the deterioration in relations between the US and China, problems arose in the supply of global supplies, and Focus Cone was also affected. It is now caught between the two major economies through which it grew.
America and China are fighting over many issues, but one of the main fronts of this fight is Taiwan, where the headquarters of Focus Con is located.
Taiwan has long been a contentious issue, but Chinese President Xi Jinping has made the issue controversial again with promises of unification. On the other hand, US President Joe Biden has openly announced his support in the event of an attack on Taiwan.
A few people in the US have crossed China's red line by talking about Taiwan's complete independence, but the White House's position is that diplomatic relations with China are maintained.
The US Secretary of State Anthony Blanken's visit to China has given rise to hopes that the coldness in relations may be reduced, but there are also fears of an escalation of the conflict. According to an American general, war may break out in the next few years.
Shihoku Goto, deputy director of the Wilson Center's Asia program, says, "The US and China are in a strategic competition, and the focus is on who wants to trade with both, but there can only be one winner."
Ying Liu says it is not that simple. According to him, Focus Cone's business model, which relies on American design and Chinese manufacturing, is not completely dead.
"We employ a lot of people and more countries, including China, want to help their people," he says.
Ying Liu believes the Chinese government also wants to keep companies like Focus Con alive because they provide many jobs.
Talking to the BBC, he said 'has there been any pressure on this model so far? We did not see that.
However, Western countries are now talking about business companies and countries moving away from China. This is a long-term strategy aimed at reducing global dependence on China, but work on this strategy has not yet begun.
When we asked him if his business was being affected, he gave a cautious answer.
He said that some clients are urging him to take his production out of the chain, but that decision is his, not Focuson's.
"Their governments are pressuring them to move away from China."
The challenge of the Coruba epidemic
Apart from global politics, Corona can also be an important reason to move away from China.
In 2022, hundreds of workers walked out of the world's largest iPhone manufacturing plant in China, Foxconn, due to strict policies, lack of quarantine space, and the Omicron virus.
Ying Liu says that 'what the world saw was due to the lack of transportation and that was also caused by China's corona policy.'
When questioned further on the matter, he admitted that he should have handled the matter differently.
"If this ever happens again, I will stop the production," he said, adding that he was willing to accept his clients' displeasure.
The success of his company is of course due to the clients, but the focus is just as important to those clients.
To understand how important focus is to Apple, one need only look at how many iPhones the company makes, 60 percent by some estimates.
A factory located in ChinaIt manufactures some of the most important parts of the iPhone, including the camera module, connectors, and even the camera casing.
iPhone on wheels
It is because of this expertise that Young Liu hopes his company will succeed in its next endeavor, which is about electric vehicles.
He took us for a ride in a car during which he pointed to the car's control panel and said, 'Look, this is a big iPhone and we are familiar with it.'
The flashy white SUV Focus Cone is priced with the global middle class in mind.
"Conventional vehicles have a mechanical engine, but electric vehicles have a battery and a motor, so this is a good opportunity for us," he said.
Focus Cone hopes to capture five percent of the global electric vehicle market in the next few years.
According to him, electric vehicles will not be made at the same location. Under his plan, factories to manufacture vehicles should be set up in the US, Thailand, Indonesia, and perhaps even India.
For now, his company is focusing on what it does best, manufacturing electronic products, but shortly, Focus Kon may start selling the vehicles it manufactures.