Recently, the Taiwanese company Pagatron ,main Apple Inc. supplier who assembles new iphone 5c , has facing slower order for the 5c model. According to the statistic, the net profit for the company was 84 millions in the third quarter, although it is higher than the third quarter last year, but it is still below the analyst forcast.  Back in May, the company had experienced the all time on the share price after it won the iphone 5c orders away from rival Hon Hai Precision Industry, the another  Apple supplier.

Nevertheless, Pegatron was reported by human rights group in China  for having workplace violations in three of its factories in summer. After that incident happened, Apple was thinking to add another manufacturer to assemble iphone 5c in order to increase competition for Pegatron and reducing profit margins. Apple is known to be diversifying its list of suppliers in order to reduce risks.

In my opinion, the primary reason why Pagatron losing orders is because the company does not  conduct the business in an ethical way. As a result, Apple Inc. will find a new supplier because it afraid that Pagatron is going to alter Apple’s reputation.   In  addition, another factor  that causes the company losing orders will be that the  iphone 5c itself  does not appealing to consumers. It is lacked of product uniqueness, it is identical to the iphone 5 handset, except with a  plastic color case.  Also, the point of difference of iphone 5c is to provide a cheaper, more accessible iphone; however, it is still relatively expensive for middle class people.

Link:

“Apple iPhone maker Pegatron’s profits below forecast.”BBC NEWS 11 nov 2013, n. pag. Web. 12 Nov. 2013. <http://www.bbc.co.uk/news/business-24896679>.