Taiwan-based company Foxconn, officially known as Hon Hai Precision Industry Co., made a name for itself in contracts manufacturing by making Apple's iPhones. But few know the electronics manufacturer has been developing new technologies and has a sizable patent portfolio. "In the highly competitive technology industry, IPR has covered each part of the value chain, including R&D, manufacturing, marketing, investment, merger and acquisition, etc. To win out, traditional manufacturing industries should achieve industrial upgrading by all means, such as attaching great importance to R&D and marketing." Said Yuan Zhenfu, professor from IPR college under Shanghai University.

Transfer from fabrication to creation

Foxconn has sold some head-mounted display technology patents to Google for an unspecified amount last year. In a statement, Foxconn said it has applied for 128,400 patents and obtained  more than 64,300 patents world-wide as of the end of the first quarter of 2014. In 2010, it has filed 1,438 patent applications in USA, making itself the 13th world-wide. In 2013, the rank went up to the 8th.

"Right now, it is the patent that helped Foxconn gain the name of patent seller than a mere OEM manufacturer. Honestly, to be a qualified contractor， a company should not only respect its business partner's IPR, but also, be more innovative to provide better processing technique and outstanding quality. Patents and business secrets should be its strength to be a qualified contractor." said Professor Yuan.

Focus on both manufacture and innovation

According to the inside watcher, selling patents to Google is part of Foxconn's plan to pursue its transformation. But, they should notice that the profit is limited now and IPR is the key to pursue industrial upgrading.

According to Yuan, in the age of the information economy，as an effort to improve and strengthen enterprises' core competence, they should attach great importance to R&D or innovation. Yuan thinks that the both ends of Smiling Curve in the value chain, R&D and marketing are making the most profits and potential value, while the middle part of the chain, fabrication is making the least. As a result, traditional industries should transfer from fabrication to innovation and invest more on R&D and marketing.

For many years, Foxconn has developed itself as a giant manufacturer. Now, it's said that it would continue to invest in technology research and development, transform such investments into valuable IP assets. Yuan says that Foxconn will serve as a template for other traditional companies pursuing industrial upgrading.