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
140 months ago
Sigh, I want an iPhone made by Megatron.
Score: 14 Votes (Like | Disagree)
nishishei Avatar
140 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
140 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
140 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
140 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
140 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)

Popular Stories

General Apps Messages

Apple Announces 'Groundbreaking' New Security Protocol for iMessage

Wednesday February 21, 2024 6:00 am PST by
Apple today announced a new post-quantum cryptographic protocol for iMessage called PQ3. Apple says this "groundbreaking" and "state-of-the-art" protocol provides "extensive defenses against even highly sophisticated quantum attacks." Apple believes the PQ3 protocol's protections "surpass those in all other widely deployed messaging apps," according to its blog post:Today we are announcing...
iOS 17

iOS 17.4 Will Add These New Features to Your iPhone

Monday February 19, 2024 6:52 am PST by
Apple last month confirmed that iOS 17.4 will be released in March, and the update includes several new features and changes for the iPhone. Key new features in iOS 17.4 include major App Store changes in the EU and Apple Podcasts transcripts. The update also adds new emoji and includes preparations for the launch of next-generation CarPlay later this year. More details about the new...
samsung galaxy ring

'Apple Ring' Allegedly in Development to Rival Samsung Galaxy Ring

Tuesday February 20, 2024 2:27 am PST by
Apple is speeding up development of a smart ring that can be worn on the finger to track users' health biometrics, claims a new report coming out of Korea. Teaser image of Samsung Galaxy Ring shown at Galaxy Unpacked in January Apple has toyed with the idea of a ring wearable for several years, as indicated by several patents, but with Samsung preparing to bring its own product to market, the ...
volvo s60 drivers apple maps

iOS 17.4 Beta Adds CarPlay Option to Show Upcoming Maneuvers in Instrument Cluster

Tuesday February 20, 2024 10:47 am PST by
The fourth beta of iOS 17.4 that Apple released today adds a new CarPlay feature, according to the notes that Apple provided to developers. In supported CarPlay vehicles, there's now an Apple Maps option to show information about upcoming maneuvers in the instrument cluster. CarPlay users will be able to swap the display type between the main and instrument cluster by tapping on the map...
m3 macbook pro 14 16

Apple Now Selling Refurbished M3 Pro and M3 Max MacBook Pro Models

Monday February 19, 2024 5:04 pm PST by
Apple today began offering refurbished versions of the 14-inch and 16-inch MacBook Pro models with M3 Pro and M3 Max chip options, offering the machines at a discount for the first time since their October 2023 release. The release of M3 Pro and M3 Max models on Apple's refurbished store comes almost two weeks after the entry-level 14-inch M3 MacBook Pro first appeared on the store....
iPad Pro OLED Feature 2

Apple's Upcoming OLED iPad Pro Models Rumored to Be Much Thinner

Tuesday February 20, 2024 1:39 pm PST by
Apple is planning to update the iPad Air and iPad Pro lineups as soon as March, and the new iPad Pro models will be significantly thinner according to dimensions shared by 9to5Mac. Citing sources with knowledge of Apple's plans, the site claims that the larger version will be more than 1mm thinner. The current 12.9-inch iPad Pro measures in at 6.4mm thick, but the new model is said to be 5mm ...
apple wallet drivers license feature

Apple Said iPhone Driver's Licenses Will Expand to These 8 U.S. States

Monday February 12, 2024 7:51 am PST by
In 2021, Apple introduced a feature that lets residents of participating U.S. states add their driver's license or ID to the Wallet app on the iPhone and Apple Watch, providing a convenient and contactless way to display proof of identity or age. Unfortunately, states have been slow to adopt the feature since it was first announced in September 2021, with IDs in the Wallet app only available ...
Oled iPads and MackBook Pro Notch

Apple's OLED Roadmap: New iPad Mini, Foldable iPad Pro, and More

Wednesday February 21, 2024 5:29 am PST by
Apple is planning to launch at least nine new devices with OLED displays across the iPad and MacBook product lines, according to an updated forecast from research firm Omdia that sets out the company's plans in detail. As widely rumored, Apple's push to transition to OLED will apparently be jump-started by the release of new 11- and 13-inch iPad Pro models this year. The displays will...