14 DAY TRIAL // Apple has shifted its “budget” iPhone orders to Pegatron, a Taiwanese electronics manufacturer which currently assembles the iPad mini, according to a new report.
The low-cost 2013 iPhone has become a hot topic of discussion in the media, eclipsing even the iPhone 5S, another unconfirmed (but widely anticipated) device from Apple.
WSJ has it on file that Pegatron will be mass-producing Apple’s low-cost iPhone for 2013, and people familiar with the situation in Taiwan say the shift is a strategic one for Apple.
According to numerous reports, the device is said to employ a polycarbonate enclosure and similar specs to the iPhone 5.
“Pegatron Corp., named after the flying horse Pegasus, will be the primary assembler of a low-cost iPhone expected to be offered later this year,” the Journal, which has reliable sources in the tech industry, confirms.
It adds that Pegatron has been producing iPhones and iPads for Apple since 2011, and Apple’s decision to give it more work this year is a strategic one, according to people who are familiar with the matter.
The report cites “risk diversification after Foxconn's manufacturing glitches last year with the iPhone 5 that resulted in scratches on the metal casings, and Apple's decision to expand its product lines amid growing competition from Samsung Electronics Co.”
There’s also the matter of pricing, where Pegatron bests Foxconn (Apple’s primary assembler), as in it charges Apple less per assembled device.
Also noteworthy, Foxconn continues to generate negative headlines about its factories (bad working conditions, harsh policies, suicides, etc.), whereas Pegatron has had far less incidents at its respective plants.
Seemingly confirming recent rumors about Pegatron going on a hiring spree in anticipation of new orders from Apple, WSJ also notes that the Taiwanese assembler is expected to increase its China workforce in the second half of the year by around 40%.
Based on reports from analysts in China, Chief Financial Officer Charles Lin said the staffing increase is largely due to orders for low-cost iPhones.