A new report from The Information today highlights what it refers to as Apple’s “eroding partnership with Foxconn.” The report details how Foxconn has struggled with low margins despite Apple’s continued growth, and how the manufacturing company has used a “variety of tactics to boost its profits.”
One specific example in the story relates to the 2018 iPad Pro. When Foxconn began production trials of the redesigned iPad Pro, the company told Apple that it needed a certain amount of workers to develop the new product. This was considered “standard procedure” for Apple and Foxconn’s relationship, but Foxconn exaggerated its count.
The report explains that Foxconn did not hire as many workers as it told Apple it needed in an effort to boost its margins:
It wasn’t the first time Foxconn did this, say numerous Foxconn employees. The manufacturer has routinely asked Apple for a higher head count than required, as Foxconn has tried to eke out more profit or win new lines of business from Apple to boost its razor-thin margins.
Also, here’s an interesting tidbit related to the 12-inch MacBook. According to the report, Apple accused Foxconn of giving Google employees “a tour of a factory in China that made the metal frame of the 12-inch MacBook.” Apple asked Foxconn for security footage and visitation logs, but Foxconn refused to comply.
Elsewhere, the report says that Foxconn used “idle factory equipment” owned by Apple to work with other clients. In fact, radio frequency testing machines purchased by Apple were reportedly used by Foxconn to test Huawei smartphones.
Over the last several years, we’ve seen Apple expand its manufacturing outside of China and into India. In fact, iPhones made in India are now being exported to European markets, not simply sold domestically. Nonetheless, even in India, Apple is still working closely with Foxconn.
The full report is worth a read and can be found over at The Information.
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