Apple May Wind Up Paying More to Manufacturer Foxconn

Foxconn banner
(Image courtesy of MacRumors)

It seems inevitable that with a company’s runaway success, the costs of doing business increase exponentially. That may be the case with Apple, as a new report claims that Foxconn parent company Hon Hai will be increasing its prices for some clients, including Apple.

MacRumors is reporting that Apple’s Taiwanese manufacturing costs may be increasing this month, according to a brief note in Reuters from Citibank analyst Chang Kaiwei. It appears that Hon Hai, the parent company for Apple’s manufacturing partner Foxconn, plans to raise the prices they charge to manufacture devices such as the iPhone, iPod touch and iPad.

“Hon Hai, the world’s largest electronic parts maker, will raise prices from October for some clients, including Apple, according to a Citibank analyst,” reads the report from a Taiwan newspaper on Wednesday.

But don’t cry for Apple — the price increase is aimed at boosting profits for all on Hon Hai’s divisions, which includes customers such as Nokia, Microsoft and Sony Ericsson as well.

The report didn’t indicate how much of a price increase technology companies could expect, nor whether or not it would affect the bottom line price that end consumers will ultimately pay for their gadgets. MacRumors notes that Apple’s “healthy gross margins” should help it maintain current price points, although other companies may not be so lucky — and any manufacturing cost increases could also affect Cupertino’s ever-climbing stock price, since investors rarely embrace such news.

Follow this article’s author, J.R. Bookwalter on Twitter

News

Leave a Reply