Foxconn is passing some of those increased wage costs onto its clients.
Hon Hai, or Foxconn, is essentially the manager of one of the world's major electronics factories. Foxconn is one of the premier manufacturers of electronics designed by Apple, Nokia, Sony Ericsson, Microsoft, Dell, HP, among many others.
Although Foxconn is usually in the background, as the designers and sellers of the electronics take the spotlight, the manufacturing company has been under scrutiny for the working conditions that it gives to its workers.
A flurry of suicides cast a light on Foxconn and its employment practices. In response, Foxconn vowed to improve working conditions as well as increase wages (though there's still some question as to how effective the changes are). Such increases come at an added operating cost for Foxconn, and some of that cost is going to be passed on to the company's clients.
According to Reuters, Foxconn will be raising prices starting this month for some of the services that it provides to its clients, including Apple. Given that iSuppli estimates that the iPhone 4 costs $6.54 to make in China, it's doubtful that Apple will be feeling any sort of pinch from a higher rate.