Nov. 6, 2013, 7:25 a.m. EST
Apple signs up contractors to ramp up iPhone production
Main assembler Hon Hai is under labor scrutiny
HONG KONG — Apple Inc. is adding new contract manufacturing partners in Asia to boost production of its smartphones and tablets, people familiar with the supply chain said, as the technology company tries to ensure adequate supply to meet consumer demand.
Later this year, Apple AAPL +0.03% will outsource manufacturing of the cheaper version of its latest iPhone, the iPhone 5C, to Wistron Corp. TW:3231 -1.12% , a Taiwan-based contract maker that currently produces smartphones for BlackBerry Ltd. BBRY +0.45% and Nokia Corp. FI:NOK1V +1.65% , the people said. Apple also plans to add Compal Communications Inc. TW:8078 +0.40% to assemble its iPad Mini tablet starting next year, the people said. Also read: Apple beefs up margins on iPad Air, teardown says.
Apple is broadening its supplier base as its main assembler, Hon Hai Precision Industry Co. TW:2317 +1.09% , is focusing on producing the high-end iPhone 5S, which is currently in short supply, the people said. 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
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