Pegatron reportedly eyed for iPhone 6 Plus production to help Apple meet demand
Katie Marsal
Apple is said to be looking to expand its supply chain and possibly have partner Pegatron built iPhone 6 Plus units, as the company continues to struggle to keep up with overwhelming demand for its latest smartphones.
Pegatron is in the midst of expanding its production capacity to help with iPhone 6 supply needs, according to Nikkei. With $200 million in capital expenditure this year and $300 million planned for next year, the company is said to be boosting capacity in response to strong global demand for the iPhone 6.
In addition, the report alleged that Pegatron may now be in line to begin building iPhone 6 Plus units for Apple. It was said that Foxconn is currently the sole supplier of Apple's jumbo-sized 5.5-inch iPhone, and that the company is struggling to keep up with demand.
Apple is believed to be in the process of diversifying its supply chain, which has historically been dominated at the assembly level by Foxconn. In recent years, Pegatron has stepped into the fray, but has mostly been responsible for building Apple's low-end of iOS devices, like the iPhone 5c and iPad mini.
That began to change this year, however, as Apple contracted Pegatron to build some of its 4.7-inch iPhone 6 models. Some reports have alleged that Pegatron is responsible for as much as 50 percent of production the smaller iPhone 6 model.
With Monday's latest rumor, it appears that both Pegatron and Foxconn could also share manufacturing duties for the 5.5-inch iPhone 6 Plus. Apple doesn't break down sales by specific model, but various surveys have suggested that the iPhone 6 Plus has accounted for about 25 percent of sales of the latest generation of devices since they launched in September.
Andrew Orr
Malcolm Owen
Christine McKee
Chip Loder
William Gallagher
14 Comments
Don't do it! Becoming an Apple supplier is likely to end in tears over their "oppressive" contracts. ;)
Anyone else picture a crime fighting flying robot horse when they hear the name "Pegatron"?
Don't do it! Becoming an Apple supplier is likely to end in tears over their "oppressive" contracts.
People said I was improperly painting Tim Cook's Supply Chain Management Team as 'Stone Cold Company Killers' Heck, I think I underestimated them.
Pegatron doesn't have to 'invent' something, all they have to do is provide the floorspace, the loading docks, and the skilled workers (who they have to pay an amazing wage with great benefits relative to most piece assembly work in China). Apple will show them great upfront money (no risk), but the QA numbers will be critical to hit (QA validated units per day).
And as the '2nd' (or third) assembly facility, they will likely either get caught up binge/purge demand (no prediction of monthly/annual profits), and/or be building these for 3 years at diminishing returns per sq ft of space (when Apple only wants 50% of the Year 1 demand in Year 3, when Foxconn switches lines over to the iPhone 7).
Heckuva deal.
(Safari really wanted to put 'Megatron' in for pegatron)
From the Nikkei Asian Review:
Quote:
Cheng's statement came as Pegatron...saw revenue from its communications products grow 10% year on year and net profit surge 92% to NT$4.7 billion ($153 million) in the July to September period - the same quarter the U.S. tech giant began shipping the iPhone 6...
...Pegatron's overall revenue for the same three-month period went down 6.8% year on year to NT$236.7 billion ($7.7 billion) because of the slowdown in its core computer business as global demand for notebooks fell off.
If anyone hasn't yet noticed, I think Apple is cementing it's position as the Microsoft of the Post-PC era- the company everyone wants to partner with, and work/develop/manufacture for (despite GTAT's static).
Stick with the old guard and wither (coughSamsungcough), or prosper with Apple.
Good even I don't mind to wait for a few weeks. I don't know about others', but my orders of iPhone 6+ shipped within 3 weeks: first one pre-ordered on Sep 12, received on Oct 3rd. Second one ordered on Oct 4th, received on Oct 30th.