What you need to know
- Apple has placed two iPhone suppliers on probation in the last two months.
- A new report says it could result in 'tight' supply of the iPhone.
A new report says the supply of Apple's iPhone 12 and beyond could suffer now that two of its supply partners are on probation.
Pressure is mounting to maintain steady supply of iPhone devices, including the iPhone 12 lineup, after Apple placed two of its phone assemblers on probation due to labor issues, according to industry sources.
A report in November confirmed that Apple supplier Pegatron was found to be flouting local labor rules. As a result, the supplier was placed on probation, meaning it won't be getting any new business from Apple until the problems are fixed.
Pegatron was found to be falsifying documentation and misclassifying student workers, allowing some to work nights and/or overtime, as well as performing work unrelated to their major. Pegatron and the individuals responsible reportedly went to "extraordinary lengths" to cover up the violations.
More recently a riot broke out at an iPhone assembly plant in Karnataka, southern India, following allegations that workers had not been paid. Apple has since admitted this is in fact the case, and that Wistron, like Pegatron, has been placed on probation. According to the report, Wistron had hired many thousands of workers over the course of around eight months, but only had three HR employees to handle more than 10,000 employees. Wistron has said it deeply regrets the problems and has apologized to its workers, noting it "made mistakes" as the plant was expanded. It has said it will improve and strengthen processes for management of labor and pay, and that it has set up a 24-hour hotline for employees to file their grievances. The firm also sacked its VP in the region.