Apple is outsourcing iPhone 5c manufacturing to Wistron and Compal

Nov 6, 2013 15:31 GMT  ·  By

A report from the Wall Street Journal today confirms that Apple has been having trouble with the last generation of iPhones, and that “the high return rate of defective iPhone 5 smartphones [...] led to tensions between Apple and Hon Hai.”

Hon Hai Precision Industry, also known under the trade name Foxconn, is Apple’s iPhone assembler. Located in Taiwan, Foxconn is the largest contract-manufacturer of electronics, making everything from small plastic parts that hook up to your PC to the PlayStation 4.

Apple trusts the company with its precise machinery to cut slabs of aluminum and forge them into iPhone cases, but when the iPhone 5 came about that proved a tad more difficult than originally anticipated.

In a report discussing Apple’s problems with dwindling iPhone 5s and 5c stock, the WSJ makes an important (albeit unsurprising) reference to the past-generation iPhone.

Citing J.P. Morgan analyst Alvin Kwock, the paper says that “the high return rate of defective iPhone 5 smartphones [...] led to tensions between Apple and Hon Hai over which company would be responsible for repair-work costs.”

The issue with the Sleep/Wake button was widely known, but never publicized much. Others complained about Wi-Fi connectivity, poor battery life, and so on and so forth. The most common complaint, however, was the Sleep/Wake button failure.

Apple ended up replacing thousands of iPhone 5 units because of the flaw.

The WSJ report also mentions that Apple is hiring two new assemblers to make its plastic iPhone 5s, in order to allow Foxconn to work diligently on the aluminum-made iPhone 5s.

“Later this year, Apple will outsource manufacturing of the cheaper version of its latest iPhone, the iPhone 5C, to Wistron Corp., a Taiwan-based contract maker that currently produces smartphones for BlackBerry Ltd. BBRY +1.80%  and Nokia Corp., the people said. Apple also plans to add Compal Communications Inc. to assemble its iPad Mini tablet starting next year,” the paper said, citing people familiar with the matter.