Foxconn has doubled the pocket knife punch in the contract between him and Apple, explains Information in great detail. Manufacturers have largely contributed to the fortunes of the Taiwanese industrial giant, but the latter featured much finer margins than Apple’s, and obviously all is well to scratch out here and there.
Foxconn will use Apple-supplied equipment to produce competitive products: in 2015, this equipment will be used to make devices for Huawei … However, it has become more difficult to eat away at Apple by poking its production equipment, the builders are watching it more closely.
Two years ago, while iPad Pro production was doing well on Foxconn’s production line, Foxconn reportedly told Apple it needed more employees than necessary. A tactic that allows it to generate additional benefits for the assembler, and which will be reused ever since.
Another example, missing pieces of metal and screws were detected in the iPhone 7 during its production. Employees are expected to take this unit out and make new ones by reusing valid components from damaged iPhones. Instead, they would open it up and throw away the pieces that were inside.
In an effort to increase its margins, Foxconn has included several manufacturing steps, such as polishing the iPhone screen which is done with self-produced chemicals, not from a Japanese supplier.
Based on Information, the relationship between the two partners changed as Apple attempted to diversify its production chain. Today, Foxconn produces 60-70% of iPhones, and Apple is its biggest customer. Apple also does business with Pegatron and Wistron, but Foxconn’s capabilities make it difficult to do without them at all in the medium term.
This disclosure comes at a tense time for Foxconn, concerned about the threat Luxshare poses to its business with Apple (read: Foxconn, Luxshare: deaf competition among Apple suppliers).