Apple Expands EMS Base

{complink 379|Apple Inc.} may be diversifying its manufacturing partner lineup. According to the Website, Taiwan-based EMS company Pegatron Corp. will manufacture 50 percent to 60 percent of orders for Apple's upcoming tablet, dubbed the iPad mini. Apple reportedly has been developing a smaller, less expensive tablet computer for some time.

On its Website, Pegatron, based in Taipei, reports equity worth roughly $2.7 billion. The company says it is vertically integrated and supports a diverse base of products, including desktop PCs, notebooks, broadband, wireless systems, game consoles, networking equipment, set-top boxes, multimedia, and LCD TVs. The EMS provider was established in 2007 with the assets of Asustek Computer, and merged with Asusalpha Computer in 2008. In 2010, the company merged with Pegatron International Investment Co., Ltd. Pegatron is traded on the Taiwan Stock Exchange.

To date, reports, {complink 2125|Foxconn Electronics Inc.} has been the exclusive manufacturer of iPads.

There are a number of reasons why Apple would expand its manufacturing base. Record-setting orders of the iPhone 5 may test Apple's existing capacity. Depending too heavily on any one EMS partner is risky, so Apple may be spreading that risk by adding new subcontractors. Apple has also been embroiled in a PR nightmare because of Foxconn's alleged mistreatment of workers, but there is no indication Apple plans to disengage with Foxconn. If anything, according to, Apple may shift some iPhone 5 capacity over to Pegatron to ensure a steady supply of products.

Either way, Apple reports it is having problems delivering the new iPhones on schedule and some buyers may have to wait until October for their new devices.

4 comments on “Apple Expands EMS Base

  1. _hm
    September 18, 2012

    That is prudent decision. Being so big an organizzation, it must not depend on one CM. Also, Apple may have invested money in this CM, and it may control its management indirectly and further increase its profitibility and reduce product price for end user.

    We eagerly await iPADmini.


  2. bolaji ojo
    September 18, 2012

    _hm, Good observation. Apple may be interested in partnering with a company that it can have a better insight into its manufacturing practices so as to avoid any of the problems it has encountered with Foxconn.

  3. _hm
    September 19, 2012

    @Bolaji: Thanks. Also, Apple may be making arrangement for upcoming Apple TV.


  4. Barbara Jorgensen
    September 20, 2012

    @hm: Good point. If Apple TV follows the set-top box route, Pegatron sounds like a good fit. I still wonder, though, if Apple is actually going to make TV screens such as Sharp makes. With Foxconn taking a stake in Sharp, that seems to be the natural progression. From what I read, though, Apple TV is focusing on the set-top box and the consumer interface. It is having problems licensing programming, though, becuase cable companies don't want to compete with Apple. Can't say I blame them…

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