Sorry, Foxconn: Apple's Dating Other Manufacturers

Foxconn's getting expensive as it improves labor conditions
By Kevin Spak,  Newser Staff
Posted May 30, 2013 7:40 AM CDT
In this file photo taken on May 22, 2010, visitors to a job fair walk past the Foxconn recruitment area in Shenzhen in south China's Guangdong province.   (AP Photo, File)

(Newser) – Apple isn't exactly breaking up with Foxconn, its longtime controversial manufacturing partner. But after seeing the production glitches that plagued the iPhone 5, it's decided to have an open relationship. Tim Cook has been shifting more and more work from Foxconn to the relatively obscure Pegatron Corp, the Wall Street Journal reports. Pegatron already handles some iPad Mini and iPhone production, and will be the exclusive producer of a new, low-cost iPhone debuting later this year.

Foxconn has been getting more expensive as it works to improve work conditions, analysts point out, while Pegatron has been willing to accept thinner profit margins. Sources also say that Foxconn has annoyed Apple by doing things like switching component sourcing without telling it, and that Foxconn is unhappy with the increasing complexity of Apple's gadgets. Cook also isn't as close with Foxconn co-founder Terry Gou as Steve Jobs was. Pegatron isn't completely new to Apple either; an earlier incarnation of it handled the first generation iBooks.

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