Apple pits Hon Hai against Pegatron in supply chain squeeze

Apple pits Hon Hai against Pegatron in supply chain squeeze

Summary: 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.

SHARE:

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.

Related:

Topics: iPad, Apple, Enterprise Software, Mobility, Software

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

20 comments
Log in or register to join the discussion
  • RE: Apple pits Hon Hai against Pegatron in supply chain squeeze

    Why would anyone do business with Apple - by the time you've blown a billion or ten ramping up production enough to handle demand they dump your a$$ for your competition. Over and over and over...
    Zippereye125
    • RE: Apple pits Hon Hai against Pegatron in supply chain squeeze

      @Zippereye125 Spare us your mewling. This is business. If you are laboring under the delusion that any device manufacturer on the planet operates in a fundamentally different fashion from Apple in this regard, you are just another pathetic wanker who can't miss a chance to paint Apple as Evil.
      His_Shadow
      • RE: Apple pits Hon Hai against Pegatron in supply chain squeeze

        @His_Shadow
        What do you mean Apple is not Evil ? It has got more cache than the whole USA !
        AdnanPirota
      • RE: Apple pits Hon Hai against Pegatron in supply chain squeeze

        @AdnanPirota The fact that complete morons have been running the USA government for years does not in any way make Apple evil.
        non-biased
    • This is why you have these things called contracts.

      So that you can say: I will invest 1 billion in ramping up production in return for a guarantee of 5 billion in orders.
      fr_gough
    • RE: Apple pits Hon Hai against Pegatron in supply chain squeeze

      @Zippereye125 So apparently you don't know anything about business do you?
      non-biased
    • RE: Apple pits Hon Hai against Pegatron in supply chain squeeze

      @Zippereye125
      This is a longshot, but maybe We can find our pet afterall. Thanks we almost fell off our chairs when wwe saw this cat with a white four star on the middle of his orange back which is rare. http://www.baoveviettien.vn
      http://kynangspk.info/diendan
      http://design24h.biz
      nhtuyenbk
  • Bull

    I'm an Apple fanboi, but I'm also a contract manufacturer. NOTHING pisses me off more than when I work my arse off my customer, beat the tar out of the price, work my people on Sundays and holidays, and bail them out of jam after jam (without charging them a premium for it), only to have them second-source for one lame reason or another. "Way too dependent" is just one such reason. After you make me "way too dependent" on your business you screw me? That's not "good business". That's treating someone who you want to be your "partner" like they don't matter. It's why we won't do business with US automakers, but we'll do whatever any transplant wants. Loyalty cuts both ways.
    m0o0o0o0o
    • RE: Apple pits Hon Hai against Pegatron in supply chain squeeze

      @m0o0o0o0o Wahahahahahahaaaaa...<br><br>Apple is on track to make over 100 million various devices this year alone. None of your personal anecdotes apply to a company that has a massive global reach.
      His_Shadow
    • Then I suggest you hire a lawyer to help you write better

      contracts.
      fr_gough
    • RE: Apple pits Hon Hai against Pegatron in supply chain squeeze

      @m0o0o0o0o

      I suggest you prove you are a contractor to Apple - not just another spin merchant.
      richardw66
    • RE: Apple pits Hon Hai against Pegatron in supply chain squeeze

      @m0o0o0o0o Your right, loyalty does cut both ways. I use contract manufactures all the time all over the country and loyalty isn't normally part of their business model. There are a couple that seem to care about their customers and I will give those so leeway in regard to pricing and turn around because I know they will take care of me in the long run. The majority though will jack their customers around whenever it benefits them.
      non-biased
  • RE: Apple pits Hon Hai against Pegatron in supply chain squeeze

    First Foxconn (Hon Hai) isn't a Contract Equipment Manufacturer (CEM).. It is a Contract Manufacturer (CM)
    With intentions of becoming a ODM (original design manufacture).

    I too provide CM work for numerous companies (including Foxconn - as a twist of fate would have it).
    I too would like to see a bit more appreciation (loyalty) for the additional support provided.
    But, in this world, it isn't going to happen.

    It has come down to:
    Yea, you did all these great things for me last week, but what have you done for me today?

    Apple , Foxconn I don't care what happens to them.
    Apple represents a very small percentage of Foxconn's business ( Foxconn has ~1.3 million employees)
    Apple's 100 million devices? not that big of deal.
    What? 100 devices / year per employee?

    But I doubt either of them are agreeing to contracts they can't live with.
    Not the case for smaller CMs in dealing with larger companies.. they are often forced in to very bad situations - just because they can't afford the legal costs to be treated right (agreed to ). Big companies can get better lawyers, resolutions take years in the courts, etc..)

    If you think the system is anywhere near fair.. keep dreaming.

    Apple splitting up the production? Even if the price is higher with alternate source, it makes a good strategy.
    Neither should be more than 20-30% dependent on the other.
    jrlambert
  • cong ty bao ve

    This is a longshot, but maybe We can find our pet afterall. Thanks we almost fell off our chairs when wwe saw this cat with a white four star on the middle of his orange back which is rare.


    http://baoveviettien.vn
    http://kynangspk.info/diendan
    http://design24h.biz
    http://planet.edu.vn
    nhtuyenbk
  • Acne Treatment Review

    Very efficiently written information. It will be priceless to anybody who uses it, together with myself. Sustain the good work ??? for positive i will try extra posts.
    <a href="http://www.clearskinmax.net/acne-treatment-review/">Acne Treatment Review</a>
    mikehenry1
  • Physical Therapist Jobs

    Merging with the Fusion Centers and Fire Service would be a great decision as this would open outlet of knowing more the community whom the Fire Department are rendering their services
    <a href="http://www.therapistjobsonline.com/listings/physical-therapist-jobs/physical-therapy">Physical Therapist Jobs</a>
    mikehenry1
  • Thirty One Totes

    iphone sending information i'll get it so ice workkkkkkkkkkkkkkkkkkkkkkkkkkkkk keeeeeeeeeeepppppppppppppppppppppp it on. great workkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkkk.
    -<a href="http://www.mythirtyone.com/catalogs/">Thirty One Totes</a>
    mikehenry1
  • what define business

    <a href="http://www.enviko.com/sunpower">Sunpower</a>
    business is business, i guess there is a good thing on this well definitely it has also a disadvantage to it.
    lala14
  • functional

    [url=http://www.enviko.com]Solar PV Installers[/url]
    whatever it is the apple give jobs and has contribution a lot in the economy. We can't deny that it was part of their strategy to gain more income.
    lala14
  • long live Apple

    [url=www.medsempire.com]Medsempire Grace<[/url] the Pegatron is definitely a good item in iphone 4. Earning the market and stay long must have an excellent strategy as the Apple has. Apple has its best feature ever compare to others.
    shomaimai