Production line workers at Foxconn's southern China manufacturing hub will get a 30 per cent pay rise, after a string of deaths at the site focused attention on working conditions.
Foxconn assembles Apple's iPhones and iPads.
Taiwan's Hon Hai Precision Industry, owner of Foxconn, said today that the cash component of wages would rise by 30 per cent effective immediately, more than the 20 per cent rise the company had talked about late last month.
It said the higher increase reflected rising prices in China, and it hoped to earn workers' respect and raise efficiency.
A total of 10 workers have died at the company's base in southern China this year, all apparently suicides. The deaths have triggered investigations by Apple and other big clients, including Dell.
Apple chief executive Steve Jobs said yesterday he finds "troubling" a string of worker deaths at Foxconn, but said its factory in China "is not a sweatshop."
Mr Jobs was making his first public comments about apparent employees' suicides at a complex operated by the unit of Hon Hai Precision Industry, which also counts Hewlett-Packard and Dell among its clients.
At this year's All Things Digital conference, an annual gathering of A-list technology and media executives in California, Mr Jobs sniped at Adobe Systems's "waning" Flash technology, vowed not to get into a search battle with Google, and waxed lyrical about the future of tablet PCs.
Mr Jobs also talked about how he conceived the iPad even before the iPhone. Apple released the iPad in April and it has quickly defined the tablet computer market, selling more than 2 million units in the first 60 days.
But the string of deaths at Foxconn's base in southern China, which critics blame on stressful working conditions, threatens to cast a shadow over the device's success.
"It's a difficult situation," Mr Jobs said on stage. "We're trying to understand right now, before we go in and say we know the solution."
The iPad's momentum has helped drive share gains.
Apple last week overtook long-time nemesis Microsoft to become the world's largest technology company by market value and Apple's shares have spent much of 2010 hitting new highs.
Shares of Cupertino, California-based Apple rose 1.5 per cent yesterday to end at $260.8 on the Nasdaq.
The company's growing clout and business ambitions have increasingly put it at the centre of several high-profile disputes and in the regulatory spotlight.
The US Justice Department is making preliminary inquiries into whether Apple unfairly dominates the digital music market through its iTunes store, sources say.
Hostility between Apple and Adobe has been brewing for months. Apple has criticized Flash as a buggy battery hog, while Adobe has accused Apple of exerting tyrannical control over developers creating programs for the iPhone and iPad.
"We didn't start off to have a war with Flash or anything else. We just made a technical decision," he said.
Adobe's Flash multimedia technology allows video and interactive media on the Web
Apple is widely expected to unveil its newest iPhone next Monday, when Mr Jobs delivers his keynote address at its developers conference in San Francisco.
Consumers may already have gotten a sneak peak of the next iPhone after a prototype, famously lost by an Apple employee at a bar earlier this year, was purchased and displayed online by a technology blog.
Mr Jobs said there was debate about whether the phone was simply picked up after being left at the bar, or actually stolen out of the employee's bag.
Reuters