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Apple Moves Away from Foxconn, Pegatron Steps Up

Cult of Mac reports via Reuters:

Hon Hai Precision Industry, better known as Foxconn, has long been Apple’s biggest manufacturing partner, with around 60-70% of its revenue coming from the Cupertino company. But local rival Pegatron is hoping to change that.

By offering Apple more competitive prices and sacrificing its profit margins, Pegatron appears to be securing iPhone and iPad assembly orders that would have normally gone straight to Foxconn.

What’s more, it’s though that Pegatron will play a big part in manufacturing Apple’s rumored low-cost iPhone after the company announced it will increase its number of workers in China by up to 40% in the second half of 2013.

“Pegatron posts a long-term risk to Hon Hai because as it catches up on margins by supplying more components, it can provide more aggressive pricing,” Daiwa Capital analyst Birdy Lu told Reuters. “Hon Hai’s margin uptrend is not a guarantee.”

Notably, Pegatron is already an Apple partner, though much of its current work revolves around working on older Apple products, like the iPhone 4S. The company, though, is involved with iPad Mini manufacturing.

Source: http://www.edibleapple.com/2013/05/13/apple-moves-away-from-foxconn-pegatron-steps-up/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+EdibleApple+%28Edible+Apple%29

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