Apple allegedly approves Pegatron for iPad 3 production, but is not replacing Foxconn

<div dir="ltr" style="text-align: left;" trbidi="on"> <span class="Apple-style-span" style="border-collapse: separate; color: #444444; font-family: Georgia,'Bitstream Charter',serif; font-size: small; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 24px; orphans: 2; text-indent: 0px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px;"><div style="background-color: white; color: #444444; font-family: Georgia,'Times New Roman','Bitstream Charter',Times,serif; font-size-adjust: none; font-size: 13px; font-stretch: normal; font-style: normal; font-variant: normal; font-weight: normal; line-height: 19px; margin: 0px; max-width: 640px; padding: 0.6em;"> <div mce_style="text-align: center;" style="color: #444444; font-family: Georgia,'Bitstream Charter',serif; font-size: 16px; line-height: 1.5; margin-bottom: 24px; text-align: center;"> <img alt="" class="aligncenter" height="66" mce_src="http://img51.imageshack.us/img51/4683/ipad713.jpg" src="http://img51.imageshack.us/img51/4683/ipad713.jpg" style="border-style: solid; border-width: 0px; clear: both; color: #444444; display: block; font-family: Georgia,'Bitstream Charter',serif; height: 110px; line-height: 1.5; margin: 8px auto; max-width: 640px; width: 465px;" width="279" /></div> <div style="color: #444444; font-family: Georgia,'Bitstream Charter',serif; font-size: 16px; line-height: 1.5; margin-bottom: 24px;"> According to Taiwan Economic News, Taiwan-based Pegatron has outbid Foxconn for production of Apple's next-gen iPad (or "iPad 3" until/unless Steve Jobs gives it a better name). While other news outlets such as BGR are reporting this as an<span class="Apple-converted-space"> </span><span class="Apple-style-span" mce_name="em" mce_style="font-style: italic;" style="color: #444444; font-family: Georgia,'Bitstream Charter',serif; font-style: italic; line-height: 1.5;">exclusive</span><span class="Apple-converted-space"> </span>contract (meaning Foxconn would no longer produce the iPad 3), our interpretation differs. Instead, it seems Apple is diversifying production of the iPad 3 across both Foxconn<span class="Apple-converted-space"> </span><span class="Apple-style-span" mce_name="em" mce_style="font-style: italic;" style="color: #444444; font-family: Georgia,'Bitstream Charter',serif; font-style: italic; line-height: 1.5;">and</span><span class="Apple-converted-space"> </span>Pegatron.</div> <div style="color: #444444; font-family: Georgia,'Bitstream Charter',serif; font-size: 16px; line-height: 1.5; margin-bottom: 24px;"> "Hon Hai is likely to turn Apple's<span class="Apple-converted-space"> </span><span class="Apple-style-span" mce_name="strong" mce_style="font-weight: bold;" style="color: #444444; font-family: Georgia,'Bitstream Charter',serif; font-weight: bold; line-height: 1.5;">another</span><span class="Apple-converted-space"> </span>contract order for iPad 3 manufacturing over the Taiwanese counterpart, as the customer has considered looking for a<span class="Apple-converted-space"> </span><span class="Apple-style-span" mce_name="strong" mce_style="font-weight: bold;" style="color: #444444; font-family: Georgia,'Bitstream Charter',serif; font-weight: bold; line-height: 1.5;">second</span><span class="Apple-converted-space"> </span>iPad supplier to reduce over-dependence on Hon Hai," the Taiwanese report indicates (emphasis ours). The wording here seems to point to<span class="Apple-converted-space"> </span><span class="Apple-style-span" mce_name="em" mce_style="font-style: italic;" style="color: #444444; font-family: Georgia,'Bitstream Charter',serif; font-style: italic; line-height: 1.5;">two</span><span class="Apple-converted-space"> </span>factories producing the iPad 3, not just one.</div> <div style="color: #444444; font-family: Georgia,'Bitstream Charter',serif; font-size: 16px; line-height: 1.5; margin-bottom: 24px;"> Spreading iPad 3 production over two contractors makes more sense than shutting Foxconn out completely. Having two contractors manufacturing the iPad 3 should theoretically go a long way toward lightening the supply constraints that have plagued the iPad line from the beginning. Apple execs have repeatedly said that iPads are being sold "as fast as we can make them," and the only thing holding the iPad back from raking in even more profits for Apple has been Foxconn's inability to churn them out fast enough to satisfy demand.</div> <div style="color: #444444; font-family: Georgia,'Bitstream Charter',serif; font-size: 16px; line-height: 1.5; margin-bottom: 24px;"> Rather than abandoning Foxconn, adding Pegatron to the mix means iPad production should increase enough to satisfy the great demand for the device. Earlier reports indicated Apple was indeed looking for a<span class="Apple-converted-space"> </span><span class="Apple-style-span" mce_name="em" mce_style="font-style: italic;" style="color: #444444; font-family: Georgia,'Bitstream Charter',serif; font-style: italic; line-height: 1.5;">second</span><span class="Apple-converted-space"> </span>supplier for iPad 3 units, not an outright replacement for Foxconn. A later report indicated Hon Hai (owner of Foxconn) said it would be able to handle production of the iPad 3 all by itself, but if the latest report from Taiwan Economic News is accurate, Apple apparently disagrees.</div> </div> </span></div>

Apple allegedly approves Pegatron for iPad 3 production, but is not replacing Foxconn

According to Taiwan Economic News, Taiwan-based Pegatron has outbid Foxconn for production of Apple's next-gen iPad (or "iPad ...

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