Foxconn, the largest producer of iPhones in the world, has launched two prototype low-Earth orbit (LEO) satellites aboard a SpaceX rocket from Vandenberg Space Force Base in California. This marks a significant moment for the Taiwanese electronics manufacturer as it looks to expand into new sectors due to struggling businesses like smartphones and laptops. The company aims to demonstrate its satellite technology capabilities to meet the growing demand for space communications.

While Elon Musk’s SpaceX has already launched over 5,000 LEO satellites for its Starlink constellation, Foxconn believes it can produce satellites primarily for corporate and government clients. The LEO satellites, developed in collaboration with Taiwan’s National Central University, are roughly the size of a backpack and weigh around 9 kilograms (20 pounds) each. They are equipped with cameras, communication devices, and other necessary equipment. Their purpose is to orbit Earth every 96 minutes at an altitude of 520 kilometers (323 miles).

Since taking over as Chairman in 2019, Young Liu has been focused on diversifying Foxconn’s business interests. The company has shifted its focus to electric vehicles, digital health, robotics, artificial intelligence, semiconductors, and now, communication satellites. In an effort to secure future growth opportunities for the next decade or more, Foxconn aims to expand and capitalize on these industries.

While Foxconn is known for manufacturing iPhones, its revenue is expected to decrease by about 6% this year. The unpredictability of the satellite business compared to the consistent demand for iPhones poses a challenge. However, government orders for satellite technology could provide some stability for Foxconn as it ventures into this new sector. Taiwan, for example, plans to launch its first LEO communication satellite as part of its strategy to establish space-based alternatives to undersea cables for internet connectivity.

In addition to satellite technology, Foxconn’s electric vehicle business could also support its expansion into the satellite industry. Real-time communication technology is vital for electric vehicles, and this expertise could be beneficial for the satellite business as well. By leveraging its background in electronics and experience in manufacturing various consumer devices, Foxconn aims to make a successful transition to the space industry.