Apple is reportedly looking to shift production of older iPhones to Taiwanese supplier Pegatron in an effort to avoid losing billions in revenue as a result of its patent dispute with Qualcomm.

pegatron logo
Earlier this week, Qualcomm was granted an import ban on the iPhone 6s through iPhone X in China after the court found those devices violated two Qualcomm patents.

However, according to documents seen by Nikkei Asian Review, smartphones produced by Pegatron are exempt from the ban because the Taiwanese supplier paid license fees for the contested software, whereas rival iPhone assemblers Foxconn and Wistron did not.

One of the sources with direct knowledge of the situation said Apple had held initial discussions with Pegatron about whether the Taiwan-based company could take on more iPhone production to make up for the impact of the ban. No decision has yet been taken, however.

[...]

Taking into account a consumer shift to newer models, it is estimated that the order barring production of older iPhone models by Foxconn and Wistron could hit Apple's sales by some $5 billion in 2018 or 3% of total iPhone revenue.

This could be halved to about $2.5 billion if Pegatron is exempted, two sources said. And if Apple later decides to ask Pegatron to step up production, the impact would be even less, the sources added.

Apple has warned that upholding the iPhone ban would cause "truly irreparable harm" to Apple, other companies, and consumers if it is forced to withdraw its devices from the market.

Late on Thursday, Apple said it will release a software update to iPhone users in China early next week that the company says should address the patent-related issues.

Top Rated Comments

chinito77 Avatar
86 months ago
"Apple has warned that upholding the iPhone ban would cause "truly irreparable harm ('https://www.macrumors.com/2018/12/13/apple-warns-qualcomm-ban-irreparabl/')" to their shareholders" There, fixed it for you!
Score: 6 Votes (Like | Disagree)
Ricebucket Avatar
86 months ago
The ultimate middle finger to China is switching from a Chinese producer to a Taiwanese producer (remember, China denies Taiwan exists)
This has to be the ultimate misinformed comment.

All of the manufacturers in question are companies from Taiwan. All of them manufactures primarily in mainland China, not on the island of Taiwan. And there is not a problem for these companies to operate in mainland China.

Furthermore, this lawsuit is an American company suing another American company. Why is a middle finger to China even necessary? Especially since the mainland Chinese market is the largest mobile phone market in the world.

Your comment does not make sense whatsoever.
[doublepost=1544802259][/doublepost]Why can't Apple just pay Qualcomm for the lawsuit like Pegatron does? Pegatron will end up passing the costs to Apple anyways for whatever they're paying in royalties.
Score: 4 Votes (Like | Disagree)
JPack Avatar
86 months ago
The ultimate middle finger to China is switching from a Chinese producer to a Taiwanese producer (remember, China denies Taiwan exists)
Huh? Do you realize both Foxconn and Pegatron are Taiwanese companies?

Regardless, both manufacture principally in China.
Score: 3 Votes (Like | Disagree)
thisisnotmyname Avatar
86 months ago
Bold move, likely purposely leaked to put added pressure on China to block the second Qualcomm attempt.
Score: 2 Votes (Like | Disagree)
now i see it Avatar
86 months ago
Maybe Apple isn't the victim and they need to pay what's due. Pay up.
If any "irreparable harm" comes to apple because of this ruling, it's their own fault.
Score: 2 Votes (Like | Disagree)
JPack Avatar
86 months ago
Bold move, likely purposely leaked to put added pressure on China to block the second Qualcomm attempt.
Nope. Pegatron is a second rate assembler for Apple. In the past, they’ve been relegated to manufacturing iPhone 5c and iPad mini. This is a hit for both Apple and their consumers who want quality products.
Score: 2 Votes (Like | Disagree)

Popular Stories

iphone 16 pro ghost hand

5 Reasons to Skip This Year's iPhone 17 Pro

Thursday July 10, 2025 4:54 am PDT by
Apple will launch its new iPhone 17 series in two months, and the iPhone 17 Pro models are expected to get a new design for the rear casing and the camera area. But more significant changes to the lineup are not expected until next year, when the iPhone 18 models arrive. If you're thinking of trading in your iPhone for this year's latest, consider the following features rumored to be coming...
apple tv 4k new orange

New Apple TV Expected Later This Year With These New Features

Saturday July 12, 2025 3:09 pm PDT by
A new Apple TV is expected to be released later this year, and a handful of new features and changes have been rumored for the device. Below, we recap what to expect from the next Apple TV, according to rumors. Rumors Faster Wi-Fi Support The next Apple TV will be equipped with Apple's own combined Wi-Fi and Bluetooth chip, according to Bloomberg's Mark Gurman. He said the chip supports ...
iPhone 17 Pro in Hand Feature Lowgo

iPhone 17 Pro Coming Soon With These 16 New Features

Friday July 11, 2025 12:40 pm PDT by
Apple's next-generation iPhone 17 Pro and iPhone 17 Pro Max are only two months away, and there are plenty of rumors about the devices. Below, we recap key changes rumored for the iPhone 17 Pro models. Latest Rumors These rumors surfaced in June and July:A redesigned Dynamic Island: It has been rumored that all iPhone 17 models will have a redesigned Dynamic Island interface — it might ...
macbook pro blue green

M5 MacBook Pro No Longer Coming in 2025

Thursday July 10, 2025 12:38 pm PDT by
Apple does not plan to refresh any Macs with updated M5 chips in 2025, according to Bloomberg's Mark Gurman. Updated MacBook Air and MacBook Pro models are now planned for the first half of 2026. Gurman previously said that Apple would debut the M5 MacBook Pro models in late 2025, but his newest report suggests that Apple is "considering" pushing them back to 2026. Apple is now said to be...
iphone 16 pro pro max

iPhone 17 Pro Models With BOE Displays Will Be Sold in China Only

Thursday July 10, 2025 11:59 pm PDT by
iPhone 17 Pro and iPhone 17 Pro Max models with displays made by BOE will be sold exclusively in China, according to a new report. Last week, it emerged that Chinese display manufacturer BOE was aggressively ramping up its OLED production capacity for future iPhone models as part of a plan to recapture a major role in Apple's supply chain. Now, tech news aggregator Jukan Choi reports...
apple wallet drivers license feature iPhone 15 pro

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

Tuesday July 8, 2025 11:26 am PDT by
In select U.S. states, residents can add their driver's license or state ID to the Wallet app on the iPhone and Apple Watch, providing a convenient and contactless way to display proof of identity or age at select airports and businesses, and in select apps. Unfortunately, this feature continues to roll out very slowly since it was announced in 2021, with only nine U.S. states, Puerto Rico,...
Apple Watch Ultra 2 Complications

Apple Watch Ultra 3: What to Expect

Sunday July 13, 2025 10:30 am PDT by
The long wait for an Apple Watch Ultra 3 is nearly over, and a handful of new features and changes have been rumored for the device. Below, we recap what to expect from the Apple Watch Ultra 3:Satellite connectivity for sending and receiving text messages when Wi-Fi and cellular coverage is unavailable 5G support, up from LTE on the Apple Watch Ultra 2 Likely a wide-angle OLED display that ...
iPhone 17 Air Colors Thumb 2

iPhone 17 and iPhone 17 Air Rumored to Come in These 9 Colors

Friday July 11, 2025 12:30 am PDT by
The iPhone 17 and iPhone 17 Air will be available in a total of nine color options, according to new information coming out of Asia. The iPhone 17 Air's expected color options. According to the leaker going by the account name "yeux1122" on the Korean blog Naver, accessory manufacturers are now producing camera protector rings for the iPhone 17 and iPhone 17 Air in colors to match their...