Taipei-based Pegatron, a manufacturer with whom Apple has had a long relationship, is taking over from controversial manufacturer FoxConn, at least in the manufacture of iPad Minis and the upcoming, less expensive iPhone due later this year.
According to a source that spoke to the Wall Street Journal, the reason for the shift in business isn't so much that stuff that came out last year about working conditions at FoxConn, in part via Mike Daisey and his semi-fictitious This American Life story. But rather it's "risk diversification" based on the flubs with the iPhone 5 made by FoxConn, and possibly because FoxConn doesn't have the same advantages of scale now that they're trying to clean up their act, in terms of working conditions.
Obviously, though, working with a company that has not been so thoroughly associated with slave-like labor is a boon for Apple's PR. (But Pegatron also had a bit of an issue in 2011 after an explosion that injured a bunch of workers.)
Pegatron is only a fraction of the size of FoxConn, grossing $7.4 billion in the last quarter compared to FoxConn's $27 billion, but they have a history with Apple, with the company's Senior Vice President Andy Tsai having worked with Tim Cook since the late 90s.
Pegatron, with facilities in both Taiwan and China, is expected to be manufacturing the majority of iPad Minis by the end of this year, as well as the majority of the low-cost iPhone.
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