Inside Apple’s Eroding Partnership With Foxconn
As Apple has risen to become the world’s most valuable company, its main manufacturing partner, Foxconn, has struggled with low margins. Foxconn has tried a variety of tactics to boost its profits, including charging Apple for workers it never used and taking shortcuts on component and product testing, ex-Apple and Foxconn managers said.
When Apple’s 2018 iPad Pro was undergoing production trials at the company’s largest outside manufacturer, Foxconn Technology, the Taiwanese firm gave Apple a list of how many workers it needed to develop the new product. That was standard procedure for Foxconn, whose factories across China have been responsible for assembling the vast majority of Apple’s hardware for nearly two decades. But as was often the case, Foxconn exaggerated its count.
Foxconn didn’t hire as many workers as it told Apple it needed, according to two former Foxconn employees who helped manage the Apple projects and negotiated Foxconn’s billings with Apple representatives. It wasn’t the first time Foxconn did this, say numerous Foxconn employees. The manufacturer has routinely asked Apple for a higher head count than required, as Foxconn has tried to eke out more profit or win new lines of business from Apple to boost its razor-thin margins.