Apple to Add New Assembly Partners to Bolster Production of iOS Devices

Apple is set to add new manufacturing partners in Asia to handle production of its current line of iOS devices, reports The Wall Street Journal.

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The company will contract with Wistron to produce the cheaper iPhone 5c and Compal Communications to assemble the iPad mini, though the report does not say whether the latter will assemble the iPad mini or Retina iPad mini. Apple is reportedly expanding its supplier list as its primary supplier, Foxconn, is focused on producing the iPhone 5s.

Furthermore, Apple is reportedly said to be unhappy with the labor issues that have surrounded Foxconn over the past few years, along with the repair costs said to have come with the high return rate of defective iPhones:

Hon Hai, also known as Foxconn, has also been under scrutiny for its labor practices, creating a headache for Apple, they said. According to J.P. Morgan analyst Alvin Kwock, the high return rate of defective iPhone 5 smartphones also led to tensions between Apple and Hon Hai over which company would be responsible for repair-work costs.

Last month, Apple notified Pegatron and Foxconn that it would be reducing orders of the iPhone 5c, with another report stating that iPhone 5s production was to be boosted by 75 percent to meet demand. The iPhone 5s remains in very short supply, with carriers such as Verizon and T-Mobile indicating that they could have sold even more units of the device had supplies been readily available. The iPhone 5c, in contrast, has seen good supplies throughout Apple's distribution channels, allowing the company to meet demand.

"Apple has raised this quarter's iPhone 5S orders from Hon Hai as demand has been stronger than expected. But it takes time to boost production capacity and Apple can't find other assemblers to increase production to meet demand immediately," said the Hon Hai executive.

Meanwhile, Apple's upcoming iPad mini with Retina display is said to be in very short supply, with Apple CEO Tim Cook stating last week during the company's fourth quarter earnings call that it was "unclear whether we will have enough for the quarter or not" and a report last week stating that the company is turning to Samsung as low display yields for the Retina iPad mini continue. Currently, it is not known when specifically the second-generation iPad mini will be released, as Apple has only stated that the tablet will be out by the end of November.

Related Roundup: iPad mini
Tag: wsj.com
Buyer's Guide: iPad Mini (Neutral)
Related Forums: iPhone, iPad

Top Rated Comments

swarmster Avatar
112 months ago
shortages should be a thing of the past, now when it occurs it's usually to generate hype

Not blaming you, but that kind of sounds like something the internet made up to hate on popular products.

The advertising industry in the US alone is in the hundreds of billions of dollars. Marketing creators are paid untold billions more. All that expenditure and work to get you to take the time out of your life to approach the company at retail and give them your money.

The thought that a company would take a hard-fought win in that realm, invite a customer into their store cash in hand, and intentionally turn them away and call it 'good business' is nonsensical.

Sometimes companies screw up projections. It's true! Telling the future is difficult. Sometimes they just don't have the money to bet big. In other cases, companies like Apple are producing new things in ways that no one has ever attempted in mass production using reserved capacity in as many advanced factories as are available to them. It's still hard to make 10 million phones in a weekend. Sorry.
Score: 5 Votes (Like | Disagree)
Rogifan Avatar
112 months ago
shortages should be a thing of the past, now when it occurs it's usually to generate hype

Apple needs to generate hype? Hardly. Apple wants to sell products. Kind of hard to do if the product isn't available. :rolleyes:
Score: 5 Votes (Like | Disagree)
Taz Mangus Avatar
112 months ago
Most of the Apple shortages are intentional. Because when a product is not available, it is more present in the media, and more hype is created...etc....

And the fairy tale lives on.
Score: 3 Votes (Like | Disagree)
DynaFXD Avatar
112 months ago
With the holidays coming up I'm sure Apple wants to put retina minis under as many Christmas trees as possible.

+1 This "intentional shortage" trope gets trotted out during every release. The hype is generated at the product announcement. Once release day comes around it is produce..produce..produce as fast as the wheels will turn. There is just no reason for Apple to play any sort of games to get publicity. Heck, go look at their stores. They are packed even when there isn't a new product. They've got the audience. The point is to get products in their hands ASAP and then start making money off the iTunes and App store as well.
Score: 2 Votes (Like | Disagree)
iPhD Avatar
112 months ago
Why is it always referred to as the "cheaper iPhone 5c"? I didn't think the word cheaper was part of its official name. To be consistent, why not also refer to the other iPhone as the "more ostentatious iPhone 5s dipped in gold"?
Score: 1 Votes (Like | Disagree)
AppleScruff1 Avatar
112 months ago

Samsung sold 20 million S4's over the first 100 days, and almost 40 million, not 80 million, by the end of six months. Not exactly a major accomplishment. S4 sales have tapered off so much that so e major carriers around the world have dropped it.

Not exactly a major disappointment either.
Score: 1 Votes (Like | Disagree)

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