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Foxconn-Backed Tablet Maker Said To Halt Orders To Wal-Mart

Published on Nov 15 2015 11:31 AM in Technology tagged: Wal-Mart / Tablet / Fuhu

Foxconn-Backed Tablet Maker Said To Halt Orders To Wal-Mart

Fuhu Inc., the maker of the Nabi brand of children’s tablet computers, has cancelled shipments to Wal-Mart Stores Inc. and other major retailers because of a financial dispute with supplier and investor Foxconn, according to people familiar with the situation.

Fuhu recently pulled orders for Target Corp., Best Buy Co. and Toys “R” Us Inc., leaving some of the chains in a rush to fill out their inventory ahead of the holiday season, according to the people, who asked not to be identified because the matter is private.

Foxconn, part of a massive Chinese electronics manufacturer that also makes the iPhone and other technology, is holding the inventory, said the people. Foxconn owns a stake in Fuhu as well, according to the tablet company’s website.

Retailers are now searching for ways to fill the void, including buying the Nabi tablets directly form Foxconn, one of the people said. Wal-Mart listed a 5-inch Nabi device in its printed ad for Black Friday, the kickoff to the holiday season.

Growth Story

The cancellations mark a dramatic setback for El Segundo, California-based Fuhu. The company was ranked by Inc. magazine as the fastest-growing private company in the U.S. for 2014, with a three-year sales growth rate of almost 159,000 per cent. Fuhu, which also lists DreamWorks Animation SKG Inc. as an investor, had about $195.6 million in revenue in 2013, according to Inc.

Representatives from Fuhu and Foxconn didn’t respond to requests for comment, while Wal-Mart and Target declined to comment. Though Toys “R” Us and Best Buy also declined to comment on Fuhu, they both said they had ample tablet inventory from several manufacturers for the holiday season.

Fuhu, a closely held company, released its first tablet in 2011. It later expanded to three devices that each targeted a different stage of childhood. Fuhu’s current lineup includes six tablets, including the 5-inch Nabi Jr. and the Nabi Press Tab, along with a $9.99-a-month subscription service.

In the past two years, Fuhu has faced more competition and slowing demand for tablets. Apple Inc. now sells a wider variety of tablets, and tech heavyweights such as Samsung Electronics Co. and Inc. also offer devices specifically aimed at kids.

News by Bloomberg, edited by ESM. To subscribe to ESM: The European Supermarket Magazine, click here.

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