Apple struggles to partner with the largest iPhone factory

Following a report from The Information, Apple’s partnership with Foxconn, the giant’s largest manufacturing facility, is facing difficulties due to alleged unfair tactics applied in the factory’s effort to increase its profits. Foxconn often reports to the American company that it employed more staff than it actually did and allegedly used Apple-owned equipment when manufacturing and testing components or devices for the giant’s rivals.

The two companies have been working together for several decades and the partnership has proved incredibly profitable on both sides. But over time, Apple has become one of the richest companies with a profit margin of around 40%, with Foxconn remaining in the single digits. This prompted Foxconn to adopt new tactics to increase its profits from Apple. The Cupertino-based company began to closely monitor the Taiwanese plant, officially known as Hon Hai Precision Industry. According to Foxconn managers and former Apple employees, the report said the factory “he tried a variety of tactics to increase his profits while fulfilling Apple’s orders. ”

In 2015, Foxconn allegedly used Apple-owned equipment to assemble Huawei devices, a direct competitor of the American company. The factory also allegedly repeatedly charged Apple for personnel who had never hired and neglected quality control of the company’s products. On the iPhone production line, for example, the units would have to be scrapped if any metals or screws are detected inside, but instead of canceling those units, Foxconn employees would take them apart to remove the debris themselves. Additionally, while the 12-inch MacBook was still in production prior to launch, Foxconn would offer Google employees a tour of its production line, giving them a first look at the new ultraportable. When Apple requested visitor logs, Foxconn refused to hand them over.

Apple is closely monitoring the factory’s actions

Sources say Apple has been considering this behavior for a few years. Measures taken to prevent these facts include installation of tracking tags on Apple-owned production equipment and increased monitoring of Foxconn employees. The ongoing battle is said to have put a lot of pressure on the relationship between Apple and Foxconn. The company no longer relies on Foxconn as it once did, with other partners like Pegatron, Wistron and Quanta now involved in production. Apple still needs Foxconn at the moment, but experts say Foxconn needs Apple in the long run. If the factory loses the iPhone manufacturing contract, it could have serious problems.