Foxconn buys Belkin, adding routers and smart home products to its portfolio

• Foxconn, the world's largest contract electronics manufacturer, just bought Belkin and its subsidiary brands for $866 million.
• The deal makes Foxconn a brand that markets mobile accessories, routers, and smart home products.
• The purchased brands will stay the same, but who knows if Foxconn's new ownership will cause conflicts with some of its other clients.

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Foxconn assembles an estimated 40 percent of the world's consumer electronics, making it the world's largest contract electronics manufacturer. Its workload is mostly made up of the assembly of mobile devices, tablets, and gaming consoles, but now it looks like it will be creating routers and smart home products, too. That's because Foxconn just bought Belkin for approximately $866 million, and Belkin owns Linksys, Wemo, and Phyn.

Belkin creates many popular mobile accessories, like chargers, cables, and headphones. And most people know Linksys routers from their iconic blue-and-black color scheme, a look which the company still keeps to this day. But you may not be too familiar with Wemo and Phyn.

Wemo is responsible for marketing smart home products like smart plugs and surveillance cameras, some of which are branded under Belkin. And Phyn is exclusively focused on smart home products that deal with water: conservation, leak prevention, and pressure regulation.

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The purchase agreement states that all the brands will remain but will now operate as a subsidiary of Foxconn Interconnect Technology. Even Chet Pipkin, the CEO and founder of Belkin, will remain at his post. So not much should change with this deal if you are a fan of the products under Belkin.

If you're a fan of Belkin or Linksys products, this deal should likely not change much on the consumer side.

Foxconn has promised to increase R&D spending for all the brands, as well. Eventually, as parts contracts with other companies expire, the Belkin brands will use Foxconn parts to save money. This will enable Foxconn to both bolster the Belkin brands' innovation and product output while securing its own standing in the heavily competitive manufacturing industry.

So far, none of the Foxconn subsidiary brands directly compete with each other, but Foxconn is likely not in the good graces of other companies it works with who might feel uncomfortable working with a company that has competing brands underneath it. After all, it does seem a conflict of interest to have Foxconn assemble your USB cables when it now owns a company that's well-known for making USB cables.

See also: The beginner's guide to the smart home

However, Foxconn's key customer, Apple, doesn't seem too miffed about the fact that Foxconn has ownership in HMD and Nokia, which create products that compete with the iPhone. So for now, Foxconn appears to be in the clear.

This isn't the first time Foxconn has attempted to broaden its portfolio. In the mid-2000s, the company started to make motherboards, graphics cards, and other PC components. Unable to compete with mainstay brands like Asus, Foxconn eventually gave up on the costly decision. Hopefully, this acquisition of already-established brands will prevent that outcome from happening again.

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