Foxconn Electronics, a leading contract manufacturer of various computer and electronics components, plans to stop making mainboards under its own brand, according to a media report. The company itself denies such plans and claims that it will continue to sell mainboards. However, establishing AFox company earlier this year might lead to changes within the mainboard biz strategy and tactics at Foxconn.

According to a news-story at DigiTimes web-site, certain industry sources claimed that Foxconn lately ordered its sales department to stop taking orders for some mainboard models and to stop gathering order volume forecasts for all new models. Such actions may imply that the company plans to sell off existing inventory of mainboards, which may indicate that the firm is at least considering pulling out from branded mainboard business.

Eric Zhu, channel manager at Foxconn, denied the rumour about quitting branded mainboards market in an interview with Expreview web-site. The company was reportedly adjusting its inventory, which is usually done to boost competitiveness of the whole lineup.

Foxconn has been increasing sales of its mainboards gradually for several years: it supplied six million branded motherboards in 2005, nine million mainboards in 2006, over 10 million units in 2007 and is expected to ship 13 million in 2008.

Earlier this year Hon Hai Precision Industry (which owns Foxconn brand), established AFox company to improve its positions on the branded markets. AFox will initially produce a lineup of mainboards as well as graphics cards based on chips from Advanced Micro Devices, Intel Corp. and Nvidia Corp., but eventually the firm plans to offer different families of products, including what is already sold under Foxconn brand – computer cases, cooling systems and others – as well as something that Foxconn is not known for at all: low-cost mobile computers and other products that may become successful in current market conditions.

AFox still has to begin its operations, but if Foxconn has not decided to scrap the project, it may adjust its own inventory and product mix so not to compete against its own subsidiary.

Tags: Foxconn, Afox