Apple, Foxconn secret factory for Verizon iPhone?

Apple's plans to introduce a CDMA iPhone for Verizon may be further along than thought, as Apple's iPhone factory owner, Foxconn, opens a new iPhone manufacturing plant in China.

We heard of Foxconn's plan to open a new factory outside of its existing complex while the world was discussing the outbreak of suicides at the company's huge factories earlier this summer.

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Today we learn that the company has set up a temporary workshop in inland China as it "prepares to build a permanent plant nearby to make iPhones for Apple".

Renting secrecy

The report continues to explain that over 500 employees are already working using a rented production line, churning out those precious iPhones.

That's while they wait for construction of the new $100 million factory, which will begin construction this month.

"The permanent plant will mainly make iPhones," Xinhua reported, citing a Foxconn agreement with the local city government.

This is interesting.

If iPhone demand continues to accelerate at current rates Apple -- and by inference, Foxconn -- will need to increase production capacity.

But if you consider the leaks which beset introduction of the iPhone 4, could the partners have another plan? After all, what's better than a second, smaller plant to produce a new model of iPhone in conditions of extreme secrecy?

It has to be easier to secure confidentiality across a small team of workers, rather than across the thousands who work at the larger facility.

Some may recall the case of hapless iPhone engineer, Sun Danyong, who killed himself after losing a precious prototype of Apple's next-generation iPhone (presumably an earlier build of the iPhone 4).

Short of observing Danyong's death to be the first of a series of mishaps to have plagued Apple's iPhone 4 launch, the fact a prototype device was lost almost a year ago strongly suggests Apple would already be manufacturing small quantities of iPhone prototypes, perhaps including 4G, LTE, and/or CDMA-capable models. These potentially for introduction next year.

Why?

What I guess I'm arguing is to ask if there's a possibility the rented production line might be a skunk works project by Apple and its key manufacturing partner to begin development of production processes designed for a future model of iPhone.

It is conceivable the two firms would be prepared to spend some time figuring out the best way to manufacture new devices. They will also need to train team leaders from among manufacturing workers to show others how to put the new iPhones together.

Taking a small team outside of the main plant to work in relative seclusion on such a project does reflect the way Apple runs its own internal product development.

New product design at Apple is top secret. It is not unusual for different teams at Apple to all be working on elements of the same product, with no one team fully being briefed on the significance of their task.

Not only that, but renting a production line offers flexibiliy, as well as security.

That's because it enables the partners to test out new manufacturing processes and methods, bringing in whatever specialist equipment may be required, experimenting with production processes until the requirements of the final production line are identified.

What iFuture?

Of course, we'll never know if this speculation is correct.

Product development being what it is, the plant could conceivably be involved in developing processes for an iPhone equipped with NFC sensors, particularly given that AT&T and Verizon are planning a venture to replace credit and debit cards with smartphones, taking on Visa and MasterCard.

After all, we already know AAPL has a patent for that....

Speculate away people:

Am I making a mountain from a molehill, or could Apple be developing a new iPhone, perhaps even the mythical iPhone nano designed to widen the market to see off the Android threat?

After all, a completely new iPhone model would also require its own new production line and a level of Fort Knox-like secrecy.

Equally, a Verizon iPhone may sell as many as ten million units within 12-18 months of its introduction, some analysts have said.

What's going on?

Share your thoughts in comments below.

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