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Apple Boosting iPhone, iPad Production?

Apple Boosting iPhone, iPad Production?

The Wall Street Journal reported Apple is adding new manufacturing partners in Asia to boost production of both the iPhone 5s and the 5c, as well as the iPad, as demand continues to be rampant for the products. Apple’s normal manufacturing partner, Hon Hai Precision, also known as Foxconn, is working on building strictly the iPhone 5s, which is in short supply. Apple will outsource manufacturing of the iPhone 5c to Wistron Corp. The iPad mini is expected to be manufactured by Compal Communications, which would be a new partner for Apple.

“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 a Hon Hai executive. Apple couldn’t be reached imediately for comment for this story.

Both Apple and Hon Hai have been at odds in recent months for a variety of reasons. There have been reports of unfair labor practices, as well as several defective iPhone 5s devices, which may have led to the decision for Apple to include another manufacturing partner to increase its supply chain and increase demand. Apple has continued to add to its supply chain, which is already complex. Compal, which is slated to make the iPad mini, has reserved a plant in China to start producing iPhones in China despite not getting orders from Apple yet.

Apple CEO Tim Cook has said that Apple’s supply chain is incredibly complex and not to read too much into stories about any one supplier cutting production. In this case, though, adding a new manufacturing partner suggests that it may well be not only an “iPad Christmas,” as Cook said on Apple’s recent earnings call, but an iPhone Christmas as well.

This article by Chris Ciaccia originally ran in TheStreet.com.
Copyright (C) 2013 LexisNexis, a division of Reed Elsevier Inc. All Rights Reserved.

 

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