Foxconn is the trade name for Taiwan-based Hon Hai Precision Industry Co. The Taiwanese company said Monday it has added about 10,000 assembly-line workers per week in Zhengzhou, its major production facility for iPhones, since the last week of March.

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Earlier this year, Microsoft asked suppliers in Asia to ship components for a potential watch-style device, the executives said. One executive said he met with Microsoft’s research and development team at the software company’s Redmond, Wash., headquarters. But it’s unclear whether Microsoft will opt to move ahead with the watch, they said.

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The software giant is developing a new lineup of its Surface tablets, including a seven-inch version expected to go into mass production later this year, said people familiar with the company’s plans.

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At the same time, Apple continues to work with its manufacturing partners in Asia on a less expensive iPhone that could be launched as soon as the second half of this year, these people said. The four-inch device will likely use a different casing from the higher-end iPhone. Apple has been working on different color shells for the phone but its plans remain unclear.

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Still, analysts said that the world’s largest contract electronics manufacturer, commonly known as Foxconn, may see its growth slow in the first quarter of this year and beyond, citing concerns over Apple’s sales outlook.

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HTC said it hopes revenue in the second quarter and beyond would get a boost from a new flagship phone and continued growth in emerging markets, though analysts were skeptical about the company’s outlook.

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China Mobile said the meeting took place at the company’s Beijing headquarters, during Mr. Cook’s second trip to the country in less than year. But the company declined to disclose details of the discussions, citing a confidentiality agreement. Apple’s Beijing spokeswoman couldn’t be reached for comment.

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Officials at some of Microsoft’s parts suppliers, who declined to be named, said the Redmond, Wash.-based company is testing a smartphone design but isn’t sure if a product will go into mass production.

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Makers of dynamic random access memory chips for PCs have been struggling in recent years with falling prices and slack demand as PC manufacturers cope with the slowdown. And while DRAM prices had recovered some as oversupply temporarily eased with the bankruptcy-protection filing in February of Japan’s sole maker, Elpida Memory Inc., they have resumed their downward trend in recent months.

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So what’s causing the supply shortage? Here is Hon Hai Precision Industry Co.’s take. The company, based in Taiwan with factories across China, uses the trade name Foxconn Technology Group, and assembles many Apple products including the new iPhone.

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The Taoyuan-based company, which has been steadily losing ground against Apple Inc. and Samsung Electronics Co. in the lucrative market for smartphones, said in a statement that its third-quarter net profit was 3.9 billion New Taiwan dollars ($133 million), a sharp 79 percent fall from NT$18.64 billion a year earlier.

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Two of the people said the smaller tablet will have a 7.85-inch liquid-crystal display with a lower resolution compared with the latest iPad model that came out in March.

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Hon Hai, which assembles Apple Inc.’s iPad and iPhone, said its net profit for the six months ended June 30 rose to 27.53 billion New Taiwan dollars (US$918 million) from NT$27.38 billion a year earlier. Revenue rose 25 percent to NT$1.89 trillion.

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Japanese liquid-crystal-display makers Sharp Corp. and Japan Display Inc. — a new company that combined three Japanese electronics makers’ display units — as well as South Korea’s LG Display Co. are currently mass producing panels for the next iPhone using so-called in-cell technology, the people said.

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Two of the people said that the tablet’s screen will likely be smaller than eight inches. The iPad’s screen measures 9.7 inches, unchanged since the first model was released in 2010.

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Taiwan-based HTC, which has lost its once-solid position in the U.S. market, is trying to increase its presence in emerging markets such as China and India. Despite the company’s focus on emerging markets, it has no intention to enter the low-end segment of the smartphone market, Chief Executive Peter Chou said in an interview Wednesday.

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Production is set to begin next month for the screens, which measure at least 4 inches diagonally compared with 3.5 inches on the iPhone 4S, the latest phone from Apple, the people said.

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Hon Hai, which makes Apple’s iPhones and iPads under contract, has been facing pressure to improve wages and working conditions since several employee suicides at its facility in Shenzen in 2010 and an explosion in Chengdu in 2011 that killed four workers. Following the incidents, Hon Hai, also known as Foxconn, increased salaries in China and outfitted worker dormitories with safety nets.

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Officials at some of Apple’s suppliers, who declined to be named, said the Cupertino, Calif.-based company has shown them screen designs for a new device with a screen size of around 8 inches, and said it is qualifying suppliers for it. Apple’s latest tablet, the iPad 2, comes with a 9.7-inch screen. It was launched last year.

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Telenor, which has presence in markets such as Pakistan, Bangladesh, Thailand and Malaysia, entered the Indian market late last year and now ranks seventh by the number of subscribers.

India’s less than 30 percent mobile penetration rate has attracted many foreign telecom operators to the country. And yet, even the country’s biggest mobile-phone operator by users, Bharti Airtel, is looking beyond its home market for growth because of a fierce tariff war and stalled revenue growth.

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The company, which makes Apple’s (AAPL) iPhone and its popular tablet PC, the iPad, held a carnival-like “morale-boosting” rally earlier this week with its employees at its Shenzhen manufacturing base. Under the theme of “Treasure your life, love your family and care for each other,” tens of thousands of young, costumed employees sang, danced and paraded.

“We are less stressed as we’re getting more time off from work. We are enjoying the rally,” said one factory worker who declined to give his full name.

A spate of employee suicides have cast unwanted attention on Hon Hai this year. The company gave wage increases and outfitted its dormitories with safety nets.

“For a long time, we were kind of blinded by our success,” Louis Woo, special assistant to Hon Hai Chairman Terry Guo said on the sidelines of the rally Wednesday. “To be very frank and open, I think we were caught by surprise by the structural changes in the worker composition.”

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At a news conference in Shenzhen, the company said it would increase its work force in China by nine percent this year to one million. It also plans to raise its total China work force by an additional 20 to 30 percent in 2011.

But the manufacturer expects to reduce the number of its workers in Shenzhen to between 300,000 and 350,000 employees within the next five years, from 470,000 now, as it converts plants into research-and-development and quality-testing centers.

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The chairman and chief executive of Taiwan Semiconductor Manufacturing, the world’s biggest contract chip maker, seems to be quite confident about the chip industry’s outlook.

The company is spending more than $9.34 billion over the next few years to invest in a new chip plant in central Taiwan to boost capacity and hire around 8,000 staff at the new plant.

TSMC is investing in a new high-output chip plant, or “giga fab,” dubbed Fab 15, that’s able to produce more than 100,000 wafers a month. It expects the new plant to generate annual revenue of $5 billion when it reaches full capacity. Once fully ramped up, TSMC will have three of these advanced facilities.

“The new giga fab marks our next phase of growth. It will provide our customers with advanced technology and ample capacity,” Mr. Chang said last week at a groundbreaking ceremony for the new facility.

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Last week, more than 1 million people snapped up the device in the U.S., Japan and other countries where it went on sale. But some Apple fans in Hong Kong, including visitors from China, couldn’t wait, and in some cases paid more than $3,000 for a gray-market iPhone 4.

Lo Lau is earning a handsome profit before the iPhone 4’s official debut in Hong Kong next month. He owns a handset store in Mongkok, a Hong Kong neighborhood that’s well-known to anyone shopping for unlocked iPhones and other gray-market electronics.

“We bought about 30 iPhone 4 handsets from the United Kingdom and the U.S., and they were sold out quickly within a few hours,” Lau said. “Many enthusiastic buyers have made pre-orders, awaiting our shipment of more gray-market iPhone 4s in the coming few days, and half of them are mainland Chinese visitors.”

Many of the cellphone shops inside Sincere Podium, a Mongkok electronics mall located in Mongkok, have eye-catching signs saying, “The latest iPhone 4 is available!”

There are two types of gray-market iPhone 4s for sale: the locked U.S. model and an unlocked British version.

The locked U.S. models are going for $1,135 to $1,394, while the less-restricted unlocked iPhones start at a hefty $2,168 and go as high as $3,096.

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Separately, the chairman of its Foxconn International Holdings Ltd. handset manufacturing unit, which assembles handsets for Motorola Inc. (MOT) and Nokia Corp. (NOK), told shareholders in Hong Kong Tuesday it plans to conclude price negotiations for its products with clients in the third quarter to mitigate the impact from recent wage increases, suggesting price increases may be in store.

The wage-increase phenomenon “is negative to [Hon Hai's profit margin] in the short term, but we believe it is positive in the long term,” Mr. Gou said Tuesday at the company’s annual shareholders meeting.

Hon Hai, which employs some 800,000 workers in China, is now accelerating automation to reduce its reliance on labor.

“In the long term, the number of our employee might decrease,” he said, declining to be specific about how the company might want to adjust its work force.

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