Apple shifts supply chain away from Foxconn to Pegatron

13 years ago

“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.”

Dou 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.