Apple 2.0

Covering the business that Steve Jobs built

iPads and iPhones are "very difficult to make" says Foxconn

June 9, 2011: 6:57 AM ET

But the world's largest electronics manufacturer is not complaining

iPad 2 disassembly. Photo: iFixit

Hon Hai chairman Terry Gou, whose Foxconn subsidiary does the final assembly on the lion's share of Apple's (AAPL) product line, addressed the growing disparity Wednesday between his profit margins and his client's.

Why did Apple's net income grow 70% in its last fiscal year while Hon Hai's rose less than 2%?

Because, he told investors at a shareholders meeting, Apple's products are "very difficult to make."

"We've helped Apple make a lot of money," Gou said, according to a Bloomberg report.

But that's a good thing: "If our customers make money, then we can also make money. I most fear customers that don't make money."

Foxconn also builds products for Hewlett-Packard (HPQ), Dell (DELL), Nokia (NOK), Microsoft (MSFT) and Sony Ericsson (SNE), among others.

Gou told investors that his Taipei-based company has found ways to build iPads and iPhones more efficiently that should pay off in the next two quarters.

Via: The Next Web

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Philip Elmer-Dewitt
Philip Elmer-DeWitt
Editor, Apple 2.0, Fortune

Philip Elmer-DeWitt has been following Apple since 1982, first for Time Magazine, and now on the Web for Fortune.com.

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