Pegatron willing to invest half a billion to meet iPhone 6 demand


Apple's manufacturers literally can't build iPhones fast enough. iPhone 6 Photo: Jim Merithew/Cult of Mac
Photo: Jim Merithew/Cult of Mac

Apple manufacturer Pegatron is having to expand its production capacity to deal with the epic demand being heaped on it due to the success of the iPhone 6, according to a new report.

Earlier today, Pegatron CEO Jason Cheng told investors that his company has spent upwards of $200 million in 2014 in capital expenditure to help ramp up production, and that this figure is going to increase to a massive $300 million next year.

Although a slowdown in notebook demand meant that Pegatron’s overall revenue is down 6.8% versus the same quarter in 2013, revenue from the company’s communications products (which includes the iPhone 6) grew 10% year on year. Net profit meanwhile leaped an astonishing 92% in the July-to-September period.

For those keeping track at home, this is the same time Pegatron began shipping the iPhone 6.

As per a previous report, Apple has proven so keen on getting iPhone 6 devices flying out of the door and into customers’  hands that it has been willing to offer fellow manufacturer Foxconn more money to build them; slashing its own profit margins to increase the incentive for iPhone 6 family devices to roll off the conveyer belt. Production of the iPhone 5c has similarly been moved away from Pegatron to another manufacturer, Wistron, in order to allow Pegatron to focus on building the iPhone 6.

A related story suggests that Apple may be trying to shift iPhone 6 Plus production away from Foxconn toward Pegatron, since Foxconn is proving unable to deal with the demand for the more-popular-than-expected iPhone 6 Plus.

The recent GT Advanced Technologies debacle shows just how badly things can go wrong if you’re an Apple contractor unable to hit Cupertino’s schedule.

The fact that the iPhone 6 and 6 Plus has given companies like Pegatron a license to print money, however, shows the opposite side of that coin. Is it any wonder companies are lining up to do Apple’s bidding?