iPads are easy to sell, hard to make

It seems that manufacturing iPads is not as good a business as selling them. Apple sells as many iPads as it can get from the factories and with a good profit. But the Chinese contract electronics assembler Hon Hai — also known by the name of its manufacturing division Foxconn — has seen its profits go down with the growing demand for Apple products.

Hon Hai manufactures many of Apple’s products, including iPads, and iPhones. According to Hon Hai’s founder and chairman Terry Gou, iPads are extremely difficult and expensive to manufacture, Bloomberg reports. And Hon Hai has a lot of experience. It is the world’s largest contract manufacturer. Its clients include Hewlett-Packard, Dell and Nintendo.

Hon Hai’s founder and chairman Terry Gou believes that the company has learned how to manufacture the products more efficiently. Improvements should help the company get better profits the second half of this year.

“We’ve helped Apple make a lot of money,” Gou reportedly said in a shareholder meeting in Taipei. “If our customers make money, then we can also make money. I most fear customers that don’t make money.”

There are other factors affecting Hon Hai’s profits. The company has been facing the costs of rising wages and moving its factories to inland China from Taiwan. There was also an explosion in May at the Foxconn factory in Chengdu, China. Two people were killed in the explosion and 16 injured, all of them Foxconn employees.

Last year Hon Hai had some unwanted publicity because of the large number of suicides and suicide attempts of its employees.

The company has since raised the wages. But it has also asked its employees to sign a no suicide pledge and it installed safety nets around its premises to catch people attempting to jump.