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iPad 2 "Very Difficult To Make" Says Hon Hai

Hon Hai Precision Industry Co. Chairman Terry Gou said that increase in profits at the company did not match that of Apple, because the devices were "very difficult to make".

Bloomberg reports that Hon Hai delivered this extraordinary statement at the company's annual shareholders meeting and conceded that the company is working hard to make Apple's products more efficiently with the dividends likely to pay off by the end of the year and in 2012.

He stated "We’ve helped Apple make a lot of money," and added "If our customers make money, then we can also make money. I most fear customers that don’t make money."

Hon Hai has been hit in recent months by a wave of negative PR after a spate of suicides (17 deaths) at its factories and an explosion last month that killed three people and disrupted the production of the iPad 2.

Added to that are the financial costs of having to pay higher wages to its employees as well as having to move its factories to inland China where the cost of production is cheaper.

Apple and Foxconn are tied in an intimate relationship; no one else has the clout to build the iPad 2 and if Apple squeezes too hard on its strategic partner, it could hurt itself badly in the process.