Apple shifts supply chain away from Foxconn to Pegatron

“For years, nearly all of the world’s iPhones and iPads rolled off the assembly lines of a single company: Foxconn,” Eva Dou reports for The Wall Street Journal.

“It was a famous partnership between two outsize personalities— Steve Jobs, Apple Inc.’s intense and mercurial co-founder, and Terry Gou, the Taiwanese manufacturer’s equally demanding chairman,” Dou reports. “But under current Chief Executive Tim Cook, Apple is dividing its weight more equally with a relatively unknown supplier, giving the technology giant a greater supply-chain balance.”

PegatronDou reports, “Pegatron Corp., named after the flying horse Pegasus, will be the primary assembler of a low-cost iPhone expected to be offered later this year. Foxconn’s smaller rival across town became a minor producer of iPhones in 2011 and began making iPad Mini tablet computers last year.”

“People familiar with the matter point to strategic reasons for the shift: risk diversification after Foxconn’s manufacturing glitches last year with the iPhone 5 that resulted in scratches on the metal casings, and Apple’s decision to expand its product lines amid growing competition from Samsung Electronics Co. and others. Pegatron also has been willing to accept thinner profits as it courts Apple’s business, analysts said,” Dou reports. “While Pegatron migh seem to be a newcomer on the surface, the Taipei-based company’s Apple ties run deep, with its earlier incarnation packaging Apple computers by candlelight more than a decade ago.”

Much more in the full article here.

Related articles:
Pegatron wooing Apple iPhone assembly orders from Foxconn – May 13, 2013
Pegatron CEO says Bloomberg reporter concocted report of ‘falling iPad mini demand’ – May 9, 2013
Apple supplier Pegatron boosts China workforce by 40 percent ahead of next-gen iPhone models – May 9, 2013

13 Comments

    1. To be correct, WSJ is ignorant on this. Apple had high-volume additional assemblers, including Pegatron, for years already. It has nothing to do with Jobs being replaced by Cook.

  1. Yeah, we keep forgetting how big the production numbers are. Apple is a big company now. I expect more suppliers from more locations around the world including the United States.

    1. rp – “Apple is a big company now.”
      You’re right about that. Apple is BIG.  I believe that over 500,000 Foxconn workers assemble iPhones (including managers and quality control staff).

  2. But, how will the talking heads be able to tell the world that Apple is slowing down or cutting back. How will the be able to take into account the additional assemblies being done in Brazil too? They are going to have to wing it and make up some BS now. Oh, that is what they already do. Sorry. Forget what I just typed. Nothing changed. Same BS sources based on nothing real.

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