The plight of workers at Chinese mega-factory Foxconn has haunted Apple -- and other electronics giants -- for quite some time now. Stories of employees leaping from the roof of the facility, allegedly in response to poor working conditions, are an ugly blemish on Cupertino's otherwise friendly image of Genius Bars and worker-centric office space.
According to one analyst, Apple may have attempted to address the issue by subsidizing pay boosts at its Chinese manufacturing partner.
Writing to investors in a note obtained by AppleInsider, Berenberg Bank analyst Adnaan Ahmad believes quarterly reports from both companies shed light on possible wage subsidization from Apple.
Hon Hai Precision Industry, the parent company of Foxconn, recently reported a strong second quarter, with the company's stock rising over 6-percent at closing on Monday. The greater-than-expected earnings arrive just as Hon Hai reported increasing labor costs by nearly 100-percent.
Meanwhile, Apple's gross margins for last quarter decreased by over 4-percent. The company's capital expenditures also expanded sharply since last December. According to Ahmad, Apple seems to be fulfilling statements made by Foxconn's Terry Gou earlier this year that Cupertino would contribute to improving conditions for the Chinese workers.
"I believe Apple sees this as a competitive strength along with us, and so we will split the initial costs," said Grou back in May.
While it seems clear both Hon Hai and Apple would indeed make contributions to the wage increases, there's no indication of how the money was actually split.
Strangely enough, the subsidization news arrives just as Hon Hai is also in reinvigorated talks with another electronics supplier, Sharp. Hon Hai was set to invest $1 billion with the Japanese company to increase output at Sharp's manufacturing facilities; amid rumors the company is struggling to produce LCD screens for the next iPhone.
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