Supply chain rumor says Quanta kicking off Apple Watch production in Jan 2015

Apple-watch-03

Apple has already previewed the Apple Watch at this month’s iPhone event and the unreleased wearable is currently on display in Paris’s Collette, but Apple hasn’t shared specific availability details for the Apple Watch beyond saying ‘early 2015′. A rumor from the Asian supply chain shared by Apple Daily (via GforGames) claims Quanta Computer out of Taiwan will kick off mass production for the Watch for Apple in January 2015… Read more

Apple bans potentially dangerous chemicals from iPhone and iPad assembly process (Update: Apple statement)

Photo: Sunday Mirror

Photo: Sunday Mirror

Five months after Chinese and American labor watchdog groups petitioned Apple to investigate the use of potentially hazardous materials in its iPhone and iPad assembly process, the company has announced that it will make changes banning the use of at least two chemicals, the Associated Press reported today. The chemicals in question are benzene and n-hexane, which are tied to lukemia and nerve damage, respectively.

After conducting a four-month study, Apple says it determined that there was no evidence to suggest that these chemicals posed a threat to workers assembling its devices in twenty-two factories, but announced that it would take steps to ensure that it would not become a problem in the future. To that end, both benzene and n-hexane have been banned from the assembly line.

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Foxconn reportedly hiring 100,000 new workers to assist with iPhone 6 production

Apple iPhone 6 (Mockup) 43

iPhone manufacturing partner Foxconn is in the process of hiring 100,000 new workers in order to ramp up iPhone 6 production, according to a new report from Taiwanese Economic Daily. Another iPhone manufacturer, Pegatron, is also said to be ramping up hiring in anticipation of the new smartphone.

Hiring frenzies like this are not uncommon as new iPhone models prepare to enter production, but in the case of Foxconn the figure represents a new record number of jobs.

According to the report, Foxconn is reportedly responsible for producing 70% of iPhone 6 orders. The report claims that the device will enter mass production in July. Leaked dummies have already given us an idea of what the phone will look like, including the LCD for the rumored 5.5-inch model.

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Foxconn gives a shoutout to Apple products after profits climb 13 percent

foxconn-workers

Apple’s lead manufacturer Foxconn reported a 13 percent rise in net profit to 106.7B new Taiwan dollars (US$3.5B) following record iPhone and iPad sales, reports the WSJ. More than 40 percent of the company’s revenue comes from Apple.

The news comes a few days after Apple supplier Pegatron reported a 22 percent rise in earnings.

Hon Hai’s results were underpinned by demand from Cupertino, Calif.-based Apple, which sold 51 million iPhones in its fiscal first quarter ended Dec. 28, 2013—up 7% from the same period the previous year [...]

Apple also said it sold a record 26 million iPads in the quarter, compared with 22.9 million in the year-ago period …

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Pegatron faces renewed labor scrutiny after death of under-age worker at iPhone 5c factory [Updated]

China Foxconn

Update: Apple has issued a statement stating that it sent medical experts to investigate and found no link to the boy’s employment. It has not commented on the fact that the worker was under-age, but it has been revealed that he used his 21-year-old cousin’s ID to get the job.

Last month we sent independent medical experts from the U.S. and China to conduct an investigation of the (Pegatron) factory. While they have found no evidence of any link to working conditions there, we realize that is of little comfort to the families who have lost their loved ones.

Apple has a long-standing commitment to providing a safe and healthy workplace for every worker in our supply chain, and we have a team working with Pegatron at their facility to ensure that conditions meet our high standards.

Original story:

China Labor Watch says Pegatron has failed to properly explain the deaths of five young workers at a factory making the iPhone 5c, including one who was found to be just 15 years old, reports the Sydney Morning Herald.

Pegatron, the Taiwanese manufacturer that employed him, said the workplace environment at the Shanghai plant was not the cause of his illness. But a spokeswoman acknowledged that several other young workers at the factory had also died in the past few months [...]

“Considering the sudden deaths of five people and the similar reason of the deaths, we believe there should be some relations between the tragedy and the working conditions in the factory,” said Li Qiang, who runs China Labor Watch …  Read more

Wall Street Journal backs up analyst reports that Apple is reducing component orders for iPhone 5c

iphone-5c-deal-9to5toys

The Wall Street Journal is reporting that Apple is cutting component orders for the iPhone 5c by up to a third, reiterating the news that Apple is curtailing iPhone 5c production. This backs up a multitude of reports by industry analysts, which said that iPhone 5c demand is weaker than Apple’s initial expectations.

Apple told its Taiwanese assemblers Pegatron Corp. and Hon Hai Precision Industry Co. that shipments of the iPhone 5C in the fourth quarter would be cut, the people said. Pegatron, which analysts say assembles two thirds of the iPhone 5Cs, was told orders would be cut by less than 20%, said a person familiar with the matter. Hon Hai, which assembles the remaining low-cost iPhones, was told orders would be cut by a third, said two people familiar with the matter.

In the past, Apple CEO Tim Cook has cautioned against supplier shipments analysis as an indicator of sales performance, saying that Apple sources components from multiple manufacturers. However, the sheer number of independent reports about cuts to iPhone 5c suggests there is some underlying truth to the story. On the flip side, iPhone 5s sales seem to be booming, doing better than predicted.

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KGI’s Ming-Chi Kuo provides details on new iPads coming in Q4

Mingchi-Kuo-ipad-2013.

An analyst note from a usually reliable Ming-Chi Kuo (郭明錤) seemingly confirms our expectation that Apple will not announce new iPads on September 10th, but at a separate event later in the year.

The note makes supply chain forecasts suggesting that assembly production of the iPad 5 and iPad Mini 2 will start with low-volume production this month, and enter mass-production in the final quarter. If the tablets were to be announced on September 10th, we would expect them to be much further along the production cycle by now.

As expected, both iPad models are said to use the A7X processor, which should see be a particularly noticeable improvement on the existing A5-based Mini.

There were a couple of surprises in the note …  Read more

Picture of iPhone 5Cs leaked by Pegatron employee

iPhone-5C-Test

A quality control employee at Pegatron posted the picture above to her Weibo profile (gone now), appearing to show a large amount of iPhone 5Cs in testing mode, as noted by Nowhereelse/Engadget. The following quote was attached to the image:

“The low-end iPhone 5C to be launched for Chinese consumers in September doesn’t look much different than the Xiaomi Phone 2, right?”

It’s odd that the manufacturer does not have a better setup for testing the devices, but Engadget notes that this kind of testing setup has been seen before during factory tours.

The phone looks the same as other leaked components and mockups, and we expect it to be announced by Apple at their September 10th event. Read more

Apple gears up for expansion in China with more than 200 senior job openings

Photo: news.cn

Photo of Beijing Apple Store: news.cn

Apple appears to be preparing for increased focus on the Chinese market, with more than 200 (mostly) senior job openings appearing on LinkedIn, reports the WSJ. Some of these were added in the past three weeks, many within the last few days. Digitimes reported yesterday on Apple also seeking senior engineers in Taiwan.

With the developed market close to saturation point, the BRIC markets – Brazil, Russia, India and China – are key to Apple’s future expansion. Worldwide, smartphones represent only just over half of the total cellphone market, generating massive potential for future growth.

Apple’s challenge in China is as much a political one as it is marketing-based …  Read more

New iPhone production spurs huge growth for Pegatron even as PC decline continues

Photo: vr-zone.net

Photo: vr-zone.net

Apple supplier Pegatron is forecasting up to a 50 percent growth in its Q3 revenues despite its PC business continuing to decline, with the bulk of this growth likely to come from the iPhone, reports ReutersPegatron made the announcement after failing to hit analyst expectations in Q2.

“We expect revenue in the non-computing segment to grow by 40 to 50 percent in Q3 due to new consumer products. Q4 will also be higher,” said company CEO and President Jason Cheng in an investor conference.

Pegatron has been pretty much confirmed as making the iPhone 5C – the plastic iPhone – with some Digitimes-based rumors suggesting it may also be a secondary supplier for the 5S, whose production is being led by Foxconn. Both handsets are expected to be announced by Apple on 10th September …  Read more

Working conditions at Apple manufacturing partner Pegatron come under fire

Screen Shot 2013-07-28 at 9.27.30 PM

According to an upcoming report from the China Labor Watch, outlined by the Wall Street Journal, Apple’s China-based manufacturing partner Pegatron has come under fire for worker conditions. The report outlines several claims which shed a negative light on Pegatron:

  • Pegatron is claimed to be withholding worker IDs. This means that Pegatron employees are unable to work elsewhere because they lack proper identification.
  • The company is also claimed to be providing “poor living conditions” with “30-minute waits to enter their production facility, tight living quarters, and packed cafeterias.” Cold showers and packed dorms are also noted.
  • Workers are claimed to be working over 60 hours a week (Apple’s limit), while Apple’s June Supplier Responsibility paper points to a 46-hour work-week average for Pegatron employees.
  • At a Pegatron subsidiary, employees are said to be provided gloves that do not sufficiently protect from the materials used to create metal backplates for the iPad.

As for pay, the report claims that some workers are seeing their payment withheld. Within this issue, recruiting companies for Pegatron have come under fire for not paying the workers enough. These recruiting companies, in some situations, are even fining employees:

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Pegatron CEO says Bloomberg reporter made up report of ‘falling iPad mini demand’

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Yesterday we decided not to run with a story published by Bloomberg that Pegatron’s forecasted 25 percent to 30 percent drop for second-quarter revenue was due to “falling iPad mini demand.” It seemed a little far fetched that an Apple supplier would be giving up specific information on product demand, something we know suppliers in Apple’s circle typically remain tight-lipped on. Today CEO of Pegatron Jason Cheng has confirmed our suspicions in an email to Fortune claiming that Bloomberg reporter Tim Culpan made the iPad mini angle up.

While quoting an analyst’s expectations for iPad mini demand in Q2, Bloomberg’s Tim Culpan offered the following quote from Pegatron Chief Executive Officer Jason Cheng as proof:

A decline in revenue from the iPad Mini “is more on demand, while price has been stable. Not just tablets, also e-books and games consoles, almost every item is moving in a negative direction.”

Pegatron chief Jason Cheng says he wasn’t referring to iPad mini specifically, but rather all of its products including all tablets and game consoles, while noting that “clearly refused” to answer Culpan’s questions related to specific products. Here’s what he had to say about the Bloomberg piece: Read more