Wistron Corp (緯創) has reportedly been selected to become part of the supply chain for Apple Inc’s next-generation, larger iPhone and is expected to start shipping the product from August, sources said.
A new smaller-sized iPhone is to be assembled by Pegatron Corp (和碩) and Hon Hai Precision Industry Co (鴻海精密), while a new larger-sized model is to be manufactured by Hon Hai and Wistron, the sources told the Taipei Times.
Previously, Wistron helped assemble Apple’s iPhone 5C and iPhone 6 Plus, according to people who are familiar with the matter.
However, its participation in the assembly for the new iPhone in the second half of this year is the first time that Wistron is ramping up production at the same time as other suppliers, the sources said.
One of the sources said Wistron has prepared adequate production capacity for the new iPhone model and has started to recruit workers.
There are concerns about the risk of Wistron’s yield rate for the new project due to a sharp learning curve.
The new iPhone is much more complicated than Apple’s previous models, which necessitates a longer training period for employees, the source said.
The source said Wistron’s yield rate might be affected by the complexity of the product.
The initial development and labor costs are also factors influencing Wistron’s profitability, the source said.
Wistron is expected to start shipping the product in August, a month ahead of the new iPhone’s scheduled launch, the source said.
Wistron declined to comment on the speculation.
However, the firm said its smart device segment in the second half of this year is to outpace its performance in the first half on some clients’ new product launches.
Wistron said its shipments of smart devices this year would expand from last year, but it is still cautious about growth momentum due to the faltering global economy.
In the first quarter, Wistron reported a net income of NT$383 million (US$11.71 million), plunging 47.02 percent from last year’s NT$723 million, but an improvement from the prior quarter’s net loss of NT$122 million.
Sales in the first three months were NT$134.69 billion, representing a 10.74 percent annual decline and a 22.62 percent quarterly drop, company data showed.
Gross margin was 5.69 percent in the first quarter, up 1.03 percentage points from last year’s 4.66 percent and 1.24 percentage points form the 4.45 percent recorded in the previous quarter, data showed.
Wistron attributed the margin improvement to better execution, product management and inventory valuation.
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