Apple likely to ease dependence on Foxconn | Business| Economy and finance news from a German perspective | DW | 30.05.2013
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Apple likely to ease dependence on Foxconn

Newspaper reports in the US have indicated that US consumer electronics giant Apple is about to decrease its dependence on contract company Foxconn. A low-cost iPhone will be produced by a competitor.

"The Wall Street Journal" on Thursday confirmed an earlier online report, saying that Apple was aiming to lessen its dependence on Foxconn in Taiwan by enlisting Pegatron to assemble a low-cost iPhone it was planning to market.

Pegatron is based in Taipei and was only founded in 2008 and by 2011 had become a minor producer of iPhones. The company, which has a workforce of 100,000 in Taiwan and China, also started making iPad Mini tablets last year.

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Foxconn for its part has so far held a position of cranking out nearly all of Apple's iPhones and iPad tablet computers. Apple CEO Tim Cook is now seen as moving to diversify the supply chain.

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"The Wall Street Journal" said the California-based consumer electronics giant praised Pegatron for accepting a smaller profit in return for Apple's business contract.

Foxconn with a workforce of over one million had frequently been in the headlines over poor working conditions at its production facilities, resulting suicides, and had recently been forced to increase wages several times, making production processes more expensive.

While Apple's decision to opt for Pegatron will hurt Foxconn, the contract firm has a very diversified portfolio with a wide range of orders from Sony, Nokia and others.

hg/kms (dpa, AFP)