Apple pits Hon Hai against Pegatron in supply chain squeeze

Apple's supply chain prowess is its best advantage and it reportedly is playing its contract equipment manufacturers against each other over iPad 3 and iPhone 5 production.

Apple's supply chain prowess is its best advantage and it reportedly is playing its contract equipment manufacturers against each other over iPad 3 and iPhone 5 production.

According to the Taiwan Economic Times, Pegatron is poised to grab Apple's iPad 3 production. Apple has relied on Hon Hai's Foxconn unit to make the iPad. Apple used Pegatron for its CDMA iPhone 4.

For Apple, the move makes good business sense. The company is far too dependent on Foxconn for its manufacturing. It's best to diversify manufacturing and assembly if only to leverage a bidding war between partners.

Apple will reportedly keep its other suppliers intact. The Taiwan Economic Times reports:

Most of existing suppliers of iPad`s parts, including TPK Holdings Ltd. (touch panels), Simplo Technology Co., Ltd. and Dynapack International Technology Corp. (battery pack modules), Largan Precision Co. (camera lens modules) and Foxconn Technology Co., Ltd. (PC housings), will remain on the supplier list.

Note that the Taiwan Economic News cited industry sources for its report. The report could also have been floated to get better pricing from Foxconn.

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