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Monday, 13 May 2013 10:19

Pegatron takes on Foxconn

Written by Nick Farrell



Wants Apple business

Pegatron is attempting to undercut Foxconn and take away its Apple business. Although Pegatron is about a quarter of the size of Foxconn, it is aiming to give the outfit a good kicking. If it wins it could be bad news for Foxconn which depends heavily on Apple for 60 to 70 percent of its revenue.

Analysts say Pegatron offers more competitive pricing - at the expense of lower margins and appears to be succeeding in pulling in more orders from Apple. Last week Pegatron's said it would increase its number of workers in China by up to 40 percent in the second half of the year fuelled market speculation that it would be the sole assembler for a widely expected cheap as chips flavour of iPhone.

Foxconn has come under fire for labor conditions in its factories supplying Apple, has raised wages and improved amenities. But this has also pushed up labour costs, which means that Pegatron can quote a lower figure. Pegatron's revenue grew 29 percent in the same period from a year ago, while its net profit surged 81 percent to $78.59 million. Pegatron makes older models for Apple, including the iPhone 4S and iPhone 4. It also manufactures the iPad mini.

Nick Farrell

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