Report: Apple Needs More Suppliers Quickly
According to recent research from JPMorgan (NYSE:JPM) seen by Apple Insider, Apple (NASDAQ:AAPL) will start using a larger variety of companies to assemble its products beginning in 2014. Apparently, relying too heavily on main supplier Foxconn, also known as Hon Hai Precision Industry, has led to tensions over improperly assembled products.
Apple already uses a diverse group of component suppliers, and the JPMorgan research suggests the company is moving toward a similar model with its assemblers. Doing so would result in lower costs and help the company cope with changes in the market, Apple Insider said.
The information comes from JPMorgan’s Asian Technology research team, which pointed out that Apple has already begun to diversify outside Foxconn to include Pegatron as an assembler, as well. The research noted that Apple has had problems with defective iPhone 5 units coming from Foxconn, and it has had to send engineers in to help Pegatron meet demand for the iPad. Adding more companies to make its products would help Apple cope with such problems without a drop in its product supply.