Apple Inc. (NASDAQ:AAPL) may be in the midst of finding more suppliers to catch up with sale demands. The Wall Street Journal reports Apple Inc. (NASDAQ:AAPL) will tap Wistron Corporation (TPE:3231) to build more iPhone 5C phones. Currently, the tech giant relies on Foxconn Technology Co., Ltd. (TPE:2354) (OTCMKTS:FXCOF) for a large percentage of their manufacturing needs. However, the company’s overall relationship with Foxconn is somewhat shaky.
Disagreement between Apple and Foxconn
Foxconn Technology Co., Ltd. (TPE:2354) (OTCMKTS:FXCOF) (also known as Hon Hai) is known for unsafe labor practices. More recently, the manufacturer landed in hot water over defective iPhone 5 devices. This created a huge disagreement between Apple Inc. (NASDAQ:AAPL) and Foxconn, and now it looks like the former is looking elsewhere.
In 2014, Compal Communications will produce the iPad Mini. If Apple Inc. (NASDAQ:AAPL) wants to create and launch new products in the near future, the company will have to seek out new suppliers.
One unnamed Foxconn Technology Co., Ltd. (TPE:2354) (OTCMKTS:FXCOF) executive explained, “Apple Inc. (NASDAQ:AAPL) has raised this quarter’s iPhone 5S orders from Hon Hai as demand has been stronger than expected. “But it takes time to boost production capacity and Apple Inc. (NASDAQ:AAPL) can’t find other assemblers to increase production to meet demand immediately.”
Forty percent of Hon Hai Precision Industry Co., Ltd. (TPE:2317) (OTCMKTS:HNHPF)’s revenues come from Apple Inc. (NASDAQ:AAPL). Wistron, the reported new supplier, is a manufacturer based in Taipei. The company specializes in manufacturing computers and smartphones.
Apple to tap Compal to make iPhones
Compal Communications, Inc. (TPE:8078) is based in Taiwan, and they make tablet computers for other tech companies like Lenovo Group Limited (ADR) (OTCMKTS:LNVGY) (HKG:0992). They also manufacture smartphones like Sony Corporation (NYSE:SNE) (TYO:6758) and Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V). It’s reported that Apple Inc. (NASDAQ:AAPL) will tap them to make iPhones next year.
Apple Inc. (NASDAQ:AAPL) is expanding their product lines by offering options. There are now two iPhones, including a cheaper iPhone 5C. There is also the budget friendly iPad Mini as well as the upcoming iPad Mini with Retina display. The iPhone maker needs to recruit more manufacturers to ensure the company can meet the demand. It’s an overall good move for the company, their investors, and their customers.