Apple adding suppliers to boost iPhone 5c, iPad mini output for 2014

Posted:
in General Discussion edited January 2014
Facing growing demand and limited production capacity, Apple is reportedly set to certify two new Asian assembly partners to boost iPhone 5c and iPad mini supply, with at least one partner said to be ramping up production by the end of the year, according to a new report.

iPhone 5c


Taiwan-based contract manufacturers Wistron and Compal Communications will come on board to supplement existing partners Foxconn and Pegatron, according to a report from The Wall Street Journal on Wednesday. Wistron will reportedly handle iPhone 5c production, while Compal will build Apple's iPad mini.

Foxconn, Apple's primary manufacturing partner with a hand in nearly every Apple product, will continue to focus on production of the significantly constrained iPhone 5s. Restricted supplies of Apple's new flagship handset have contributed to sales shortfalls at several of Apple's carrier partners around the world, even as the 5s and its mid-range sibling, the iPhone 5c, have seen record sales overall.

The relationship between Apple and Foxconn is said to be strained, with the paper citing labor issues, disagreement over responsibility for manufacturing defects, and Foxconn's reluctance to dedicate more resources to orders from Cupertino as primary factors. Apple currently accounts for approximately 40 percent of Foxconn's yearly revenue.

A Foxconn executive said that chairman Terry Gou "is not willing to cut contract prices substantially to get more orders from Apple," and that the company is "aware of the risk of building gigantic production capacity for a single customer so it is adopting a more cautious stance on expanding production," according to the report.

There is no word on which specific model of iPad mini Compal will produce, though the new Retina display-equipped variant is widely expected to be in short supply. That issue is believed to be related to low display yields from partners Sharp and LG, rather than assembly constraints.

The Journal also notes that Compal has reserved one of its Chinese factories for iPhone production next year, though Apple has yet to place such an order.
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Comments

  • Reply 1 of 29
    shardshard Posts: 96member
    Oh wait, was it not reported by analysts that Apple cut orders for the 5C because it was not selling well. Now they are reporting that Apple is adding suppliers to meet demand?

    I always assumed most people know the saying, "Better to remain silent and be thought a fool than to speak and remove all doubt."

    Apparently some have not.
  • Reply 2 of 29
    paxmanpaxman Posts: 4,595member
    Apple needs to develop fully automated iPhone and iPad assembly lines.
  • Reply 3 of 29
    Quote:

    Originally Posted by shard View Post



    Oh wait, was it not reported by analysts that Apple cut orders for the 5C because it was not selling well. Now they are reporting that Apple is adding suppliers to meet demand?



    I always assumed most people know the saying, "Better to remain silent and be thought a fool than to speak and remove all doubt."



    Apparently some have not.

     

    One report is just as believable as the other.

  • Reply 4 of 29
    Quote:

    Originally Posted by sog35 View Post

     

     

    no its not.  Cutting orders for an EXISTING vendor is much easier to fake, just tell a LIE.

     

    Adding a new vendor is not very easy to fake. 


     

    If you say so.

  • Reply 5 of 29
    jungmarkjungmark Posts: 6,688member
    Wait, I thought Apple was cutting orders since the 5C was a failure. This report means the 5 S is a failure. /s
  • Reply 6 of 29
    Quote:

    Originally Posted by sog35 View Post

     

     

    Tell me how you can FAKE a vendor producing iPhones.  It would be very EASY to tell if a company is actually making iPhones or not.

     

    But it is nearly impossible to know for sure if a specific vendor has cut its orders.  You would need the original order and the updated order. Anyone can BS and say orders have been cut.


     

    I've been around long enough to see all sorts of reports about this company or that company increasing output, starting output, decreasing output, stopping output, to know that there is as much bullshit as there is credibility.

     

    Believe what you want to believe.

  • Reply 7 of 29
    flaneurflaneur Posts: 4,509member
    It's another Lorraine Luk story. We've seen her be a conduit for suspect negative news in the past. Here's a link that's not behind the paywall:

    http://online.wsj.com/news/articles/SB10001424052702303309504579181282222544024

    The "strains" in the Apple and Foxconn relationship could be a complete fiction for all we know.
  • Reply 8 of 29
    Foxconn: Apple, I love you long time. You number one guy.
  • Reply 9 of 29
    Quote:

    Originally Posted by island hermit View Post

     

     

    One report is just as believable as the other.


    although this report makes a plausible case for diversification on both sides

     

    Foxconn doesn't want to mortgage it's future by becoming wholly dependent on Apple for its revenue, and Apple's imbalanced influence on Foxconn's operations.   So they are negotiating away from a risk position (they don't want Apple to set a low price, and then demand improvements in quality and workforce satisfaction to be paid fully out of Foxconn's part of the iPhone revenue).  They'd rather diversify client base, and make Apple go find someone else with the capacity and the willingness to take less net profit.

     

    On Apple's side, having 2 or 3 assembly plants makes for 9X the hassles of optimizing the supply chain, but if they have to take the heat for all of Foxconn's issues because in effect they are foxconns only product, apple wants to ensure contracts explicitly call out the explicit risk remediations (better quality, lower work suicide rate or whatever Apple feels is the proper employee satisfaction metric).  

     

    In the end, the business is about money, both short and long term.   I'd rather have both companies strong and diversified than Foxconn being effectively an arms length subsidiary to buffer any negative issues Apple

  • Reply 10 of 29
    Quote:

    Originally Posted by TheOtherGeoff View Post

     

    although this report makes a plausible case for diversification on both sides

     

    Foxconn doesn't want to mortgage it's future by becoming wholly dependent on Apple for its revenue, and Apple's imbalanced influence on Foxconn's operations.   So they are negotiating away from a risk position (they don't want Apple to set a low price, and then demand improvements in quality and workforce satisfaction to be paid fully out of Foxconn's part of the iPhone revenue).  They'd rather diversify client base, and make Apple go find someone else with the capacity and the willingness to take less net profit.

     

    On Apple's side, having 2 or 3 assembly plants makes for 9X the hassles of optimizing the supply chain, but if they have to take the heat for all of Foxconn's issues because in effect they are foxconns only product, apple wants to ensure contracts explicitly call out the explicit risk remediations (better quality, lower work suicide rate or whatever Apple feels is the proper employee satisfaction metric).  

     

    In the end, the business is about money, both short and long term.   I'd rather have both companies strong and diversified than Foxconn being effectively an arms length subsidiary to buffer any negative issues Apple


     

    Although what you say may be true... it still doesn't make this story any more credible.

  • Reply 11 of 29

    Funny that they are not boosting iphone 5S production. Why are the even trying to hard sell 5C when everyone wants a 5S?

  • Reply 12 of 29

    Its not like you can walk into an apple store and walk away with a 5c. No stock to be found anywhere.  Must produce more.

  • Reply 13 of 29
    Quote:
    Originally Posted by island hermit View Post

     

     

    Believe what you want to believe.


    I heard that, following the pilot program of building the Mac Pro in the US, Apple will be expanding onshore manufacture. Next year's iPhone 6 will be built in Detroit, along with its all-new V8 processor.

  • Reply 14 of 29
    Quote:
    Originally Posted by Command_F View Post

     

    I heard that, following the pilot program of building the Mac Pro in the US, Apple will be expanding onshore manufacture. Next year's iPhone 6 will be built in Detroit, along with its all-new V8 processor.


     

    I know this to be true because not only did Katy Huberty discuss this with Cook but Gene Munster also sent this out in a note to investors.

     

    I think it's great that I'll be able to make V8 juice with my iPhone.

  • Reply 15 of 29
    Boost 5c production? That's a red flag right there.
  • Reply 16 of 29
    apple ][apple ][ Posts: 8,652member

    These rumors are such crap. <img class=" src="http://forums-files.appleinsider.com/images/smilies//lol.gif" />

     

    The people pulling these rumors out of their butts are just trying to manipulate markets and create FUD. Anybody foolish enough to listen to these rumors is surely going to lose money, as these people are incredibly naive.

     

    One minute we hear that the 5c is not selling well, and now all of a sudden, suppliers are going to boost the output of the 5c.<img class=" src="http://forums-files.appleinsider.com/images/smilies//lol.gif" /> 

  • Reply 17 of 29
    herbapouherbapou Posts: 2,221member
    Quote:
    Originally Posted by [email protected] View Post

     

    Funny that they are not boosting iphone 5S production. Why are the even trying to hard sell 5C when everyone wants a 5S?


     

    imo both rumors can be true. 

    Apple reduce production of the 5c at Pendagron and started a 5s line there.

    Apple needs to add new production sites for the 5c Pendagron is no longer doing.

    Apple needs to do whatever it can to increase ipad mini production.

     

    Like Tim Cook said, production adjustments could mean anything without a big picture view.

  • Reply 18 of 29
    snovasnova Posts: 1,281member
    Quote:

    Originally Posted by island hermit View Post

     
    Quote:
    Originally Posted by shard View Post



    Oh wait, was it not reported by analysts that Apple cut orders for the 5C because it was not selling well. Now they are reporting that Apple is adding suppliers to meet demand?



    I always assumed most people know the saying, "Better to remain silent and be thought a fool than to speak and remove all doubt."



    Apparently some have not.

     

    One report is just as believable as the other.


    when the stock has a good run up, you leak the 5c orders are being cut rumor.  when the stock has been beaten up you leak this rumor.

  • Reply 19 of 29
    Quote:

    Originally Posted by shard View Post



    Oh wait, was it not reported by analysts that Apple cut orders for the 5C because it was not selling well. Now they are reporting that Apple is adding suppliers to meet demand?



    I always assumed most people know the saying, "Better to remain silent and be thought a fool than to speak and remove all doubt."



    Apparently some have not.

     

    A saying I know well, and too often forget : ) 

  • Reply 20 of 29

    5s Gold is so constrained, I'm seriously considering changing colors just to be done and done with this. 

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