Foxconn fortunes boosted by new devices Operating margins at Foxconn rose this year in a sign that the primary assembler of Apple's iPhones and iPads has been able to offset some of the impact of rising wages in its major factories in China. Net profits at Foxconn rose 24 per cent to T$57bn ($1.9bn) for the first nine months of the year and revenue rose 20 per cent to T$2.23tr as sales of the iPhone 5 began to take off, beating analysts" expectations. Its gross margins improved to 4.6 per cent from 3.7 per cent last year. Margin growth is key for assembly companies like Foxconn, which typically accept low margins that they then make up by producing a high volume of goods. The past three months saw Foxconn grappling with worker unrest at one of its factories, where forty people were hospitalised and several arrested after a riot involving more than 2,000. The Taiwanese company also admitted to employing 14-year-olds at its factories as part of an internship programme. Besides the increasingly difficult task of managing its million-strong workforce across numerous factories, Investors and analysts had been worried that the Taipei-based company would struggle to overcome the rising cost of labour in China. Costs across the country have risen as labour has become more difficult to find. Analysts, however, are generally optimistic about Foxconn's fortunes through the rest of the year, in large part because of its commanding position atop Apple's supply chain. The launch of the iPhone 5 and the introduction of the iPad mini are expected to continue to boost Foxconn through the rest of the year, analysts say, particularly as supply constraints and production problems ease and Foxconn is able to ramp up production more quickly. Jasmine Lu, analyst at Morgan Stanley, said in a note to clients that Hon Hai's stronger than expected third-quarter results are "a sign of enhanced bargaining power, overshadowing its rising costs at the early stage of the learning curve for multiple new products." Foxconn does not disclose what proportion overall of its work comes from Apple, but analysts estimate that 40 to 50 per cent of its revenue comes from the California firm, a figure that has been rising as the iPhone and iPad gain in popularity while sales of other PCs begin to slow. Apple last week reported that it had sold 26.9m iPhones during the last quarter and 14m iPads, a 26 per cent increase from the previous year. The company assembles 85-90 per cent of all iPhones and all of the larger iPads, according to Barclay's. It is expected to assemble 40-60 per cent of the new iPad minis, although the other assembler tapped for the work, Pegatron, has been having difficulty with the manufacturing technique, according to analysts.