Apple Supplier Pegatron Joins Hands With Microsoft For 5G Private Networks: Report

Taiwan-based Pegatron Corp, a key Apple Inc (NASDAQ: AAPL) supplier, is joining hands with Microsoft Corp (NASDAQ: MSFT) to deploy 5G private networks as it looks to tap new growth opportunities amid a maturing smartphone market, Nikkei Asia reported on Tuesday.

What Happened: The two companies aim to build mobile 5G base stations for use in rescue missions during emergencies and in places with no or low telecom communications.  

The second-biggest iPhone assembler after Hon Hai Precision Industry (OTC: HNHPF) — which is better known as Foxconn — has been investing in research and development for 5G since late 2019, as per Nikkei Asia. The company has invested $36 million and hired more than 200 people to support those capabilities, the publication noted, citing sources.   

Pegatron is also conducting a pilot run of a dedicated local network at a serviced apartment in Tokyo, as per the report.

See Also: Huawei To Charge 5G Royalties From Apple, Samsung

Why It Matters: Pegatron and peer suppliers have also been trying to tap the 5G private networks opportunity on their own. Foxconn announced plans to build a private 5G network without a telecom vendor last year. 

Pegatron and ilk see an opportunity to build their own private 5G networks as a number of companies seek such networks for security purposes. Also, many countries are yet to deploy the infrastructure for 5G network.

Price Action: Foxconn shares closed 1.24% higher at $7.36 a share on Tuesday. 

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