Pegatron to Assemble Low Cost iPhone as Apple Works to Balance Supply Chain

iphone_5_black_whiteApple is continuing to seek improved supply-chain risk management by shifting more of its manufacturing needs from its longtime partner Foxconn to Pegatron, notes The Wall Street Journal in a new report that suggests Pegatron will be responsible for the assembly of Apple's low cost iPhone.

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. Foxconn's smaller rival across town became a minor producer of iPhones in 2011 and began making iPad Mini tablet computers last year.

Pegatron's rise means an end to the monopoly that Foxconn Technology Group—the trade name for Hon Hai Precision Industry, the world's largest electronics contract manufacturer—has held over the production of Apple's mobile products.

According to the report, the change is meant to help Apple expand its product lines and prevent supply chain disasters that could hold up the production of Apple's devices. At launch, the iPhone 5 was criticized for its tendency to scratch and scuff, which eventually led to increased quality control standards to reduce out-of-the-box issues.

Foxconn executives admitted last year that the iPhone 5 was difficult to assemble, and an April rumor suggested that Apple returned 5–8 million defective iPhone 5s to the company after continued issues with quality control.

Foxconn, in its growing heft as the world's largest electronics contract company, was also getting more difficult for Apple to control, with incidents such as changing component sourcing without notifying Apple, people familiar with the matter said. At the same time, Foxconn became frustrated with the growing complexity of Apple products, such as the iPhone 5, which is difficult to make in the volumes Apple needed.

In addition to cutting down on the risk of production issues, Pegatron is also said to have accepted less profit in order to secure orders from Apple. Tim Cook, too, is said to be responsible for the change, as he is more interested in diversification than maintaining a strong relationship with Foxconn chairman Terry Gou.

Despite being a smaller manufacturing partner, Pegatron has a long history with Apple. The company was responsible for packaging Apple's first generation iBooks, and as noted above, began assembling a small number iPhones for Apple in 2011. Currently, Pegatron produces the lion's share of Apple's iPad minis.

Apple's low cost iPhone could bring in huge profits for the smaller supply partner, as it is said to be aimed at untapped emerging markets. Earlier this month, Pegatron announced that it would boost its workforce by 40%, fueling initial rumors that the company would produce the cheaper iPhone.

The low cost iPhone is expected to come with an unsubsidized price tag between $350-$400. Release dates for the device have been murky, with sources targeting both a late 2013 release and a 2014 release.

Top Rated Comments

troop231 Avatar
110 months ago
Sigh, I want an iPhone made by Megatron.
Score: 14 Votes (Like | Disagree)
nishishei Avatar
110 months ago
Between a myriad of Android devices and an iPhone, yes it is still a status symbol. Not want it once was, for sure, but you notice an iPhone and can't tell what kind of Android you're looking at.
Get a life.

It's a $199 or $99 phone with a contract. No one over 20 years old gives a flying **** what phone you carry. If you think it's a status symbol, then it confirms you're pretty low status and that one costs at least your daily salary.
Score: 10 Votes (Like | Disagree)
AppleMark Avatar
110 months ago
Why would Apple want to open up the iPhone to people who can't afford it? Part of the appeal of the iPhone is because its a status symbol. I feel like this is a big mistake. :(

Oh dear.... Status symbol? No poor people allowed?

A small part of me hopes that Apple does fall from grace in the eyes of the masses, if only to get rid of these people with their bling bling attitude to worshiping everything that shines.
Score: 7 Votes (Like | Disagree)
iLoveiTunes Avatar
110 months ago
Why would Apple want to open up the iPhone to people who can't afford it? Part of the appeal of the iPhone is because its a status symbol. I feel like this is a big mistake. :(
Does it come with knighthood title ? :confused:
Score: 6 Votes (Like | Disagree)
tevion5 Avatar
110 months ago
I am still highly skeptical Apple are actually going ahead with the whole budget phone. I think the older models meet that market gap. Perhaps for poorer countries but I've yet to see Apple enter that sort of market. I mean, they're Apple.
Score: 6 Votes (Like | Disagree)
nishishei Avatar
110 months ago
Why would Apple want to open up the iPhone to people who can't afford it? Part of the appeal of the iPhone is because its a status symbol. I feel like this is a big mistake. :(
If you want status, become a surgeon.

An iPhone is not a status symbol in the US. Half of the EBT card users have one.
Score: 5 Votes (Like | Disagree)

Related Stories

studio buds family

Beats Studio Buds Debuting Today With Active Noise Cancellation, Stemless Design, and More for $150

Monday June 14, 2021 8:00 am PDT by
We've seen a lot of teasers about the Beats Studio Buds over the past month since they first showed up in Apple's beta software updates, and today they're finally official. The Beats Studio Buds are available to order today in red, white, and black ahead of a June 24 ship date, and they're priced at $149.99. The Studio Buds are the first Beats-branded earbuds to truly compete with AirPods...
airtag in hand

Apple Enhancing AirTags Anti-Stalking Measures With Android App and Shorter Sound Intervals

Thursday June 3, 2021 11:10 am PDT by
Apple is enhancing AirTags security to prevent stalking using the Bluetooth devices, Apple told CNET today. Apple is already sending out over-the-air updates to AirTags that will shorten the amount of time before an unknown AirTag alerts you if it is in your possession. At the current time, AirTags play a sound after three days of being away from their owner. After the update, AirTags will...
maxresdefault

Here's How Apple's New iPhone to iPhone Data Migration Feature Works in iOS 12.4

Tuesday July 23, 2019 1:20 pm PDT by
Apple this week released iOS 12.4, the newest version of iOS 12 available for iPhones and iPads. One of the new features in iOS 12.4 is an updated data migration option that uses device to device transfers rather than relying on iCloud. Apple didn't provide much information on the new data migration feature, so we thought we'd check it out in our latest YouTube video. Subscribe to the ...
youtube apple tv

YouTube Discontinuing 3rd-Generation Apple TV App, AirPlay Still Available

Wednesday February 3, 2021 3:09 pm PST by
YouTube is planning to stop supporting its YouTube app on the third-generation Apple TV models, where YouTube has long been available as a channel option. A 9to5Mac reader received a message about the upcoming app discontinuation, which is set to take place in March.Starting early March, the YouTube app will no longer be available on Apple TV (3rd generation). You can still watch YouTube on...
tmobilelogo

T-Mobile Data Breach Included Personal Information of Almost 50 Million Customers

Wednesday August 18, 2021 5:41 am PDT by
T-Mobile has issued a statement with further details about a cyberattack that the company confirmed earlier this week, confirming that the data breach included the personal information of almost 50 million current, former, and prospective customers. Late last week, T-Mobile confirmed that a forum post that purported to offer data from more than 100 million people was the result of a company...
airtag precision finding

AirTag Includes U1 Chip for 'Precision Finding' Feature

Tuesday April 20, 2021 12:11 pm PDT by
Apple's long-awaited AirTag was finally unveiled today, and as expected, the small circle-shaped accessories can be attached to items like wallets, keys, and more to allow them to be tracked in the Find My app. As was rumored ahead of release, each AirTag is equipped with a U1 chip, and on devices that also have U1 chips, there's a Precision Finding feature. U1 Ultra Wideband chips are...
m1 macbook air

Kuo: Mini-LED MacBook Air Coming in Mid-2022

Thursday July 22, 2021 7:48 pm PDT by
Apple will release a new version of the MacBook Air around the middle of 2022, Apple analyst Ming-Chi Kuo said today in note to investors seen by MacRumors. The upcoming MacBook Air will feature a 13.3-inch mini-LED display, which would make it the second Mac to gain mini-LED technology after the 2021 MacBook Pro, which is rumored to include a mini-LED display and is expected to launch later ...
Apple Films Tom Hanks Finch First Look

Apple Original Film 'Finch' Starring Tom Hanks to Premiere November 5

Thursday August 12, 2021 8:52 am PDT by
Apple today announced that the original film "Finch," starring Tom Hanks in its titular role, will premiere on Apple TV+ on Friday, November 5 and shared a first-look image from the film. The first look at "Finch," shared by Apple. The film, which is anticipated to be an awards season contender, revolves around a man, a robot (played by "Get Out" actor Caleb Landry Jones), and a dog that form ...
2016 macbook pro flexgate b

Apple Faces Another Class-Action MacBook Pro ‘Flexgate’ Lawsuit

Thursday August 20, 2020 6:43 am PDT by
Another class-action complaint has been lodged against Apple, which claims that the company was aware of a MacBook Pro design flaw that caused some devices to have backlight display issues (via Apple Insider). The so-called "flexgate" problem was present in some MacBook Pro models manufactured between 2016 and 2017. The problem appears as dark patches along the bottom of the MacBook Pro's...
macbook air m1 first benchmark

Apple Silicon M1 Chip in MacBook Air Outperforms High-End 16-Inch MacBook Pro

Wednesday November 11, 2020 4:43 pm PST by
Apple introduced the first MacBook Air, MacBook Pro, and Mac mini with M1 Apple Silicon chips yesterday, and as of today, the first benchmark of the new chip appears to be showing up on the Geekbench site. The M1 chip, which belongs to a MacBook Air with 8GB RAM, features a single-core score of 1687 and a multi-core score of 7433. According to the benchmark, the M1 has a 3.2GHz base...