Apple has allegedly decided to use Pegatron as its primary assembler of low-cost iPhones expected to release later this year, according to a new report.
The Wall Street Journal on Wednesday, cited people familiar with the matter in reporting that Apple CEO Tim Cook had shifted from Foxconn Technology Group, the previous primary supplier of iPhones and iPads, to divide its weight "more equally with a relatively unknown supplier, giving the technology giant a greater supply-chain balance".
China-based Pegatron began manufacturing minor supplies of iPhones in 2011 and iPad minis in 2012, while Hon Hai Precision Industry, the actual name for Foxconn, has held a monopoly over the production of Apple devices for years. Foxconn has been in the news for all the wrong reasons in recent years, largely because of a string of suicides at its Chinese factories, an explosion/fire at a plant where it made iPad 2s, and numerous violations of labour law found at three plants.
The Wall Street Journal attributed the shift to Foxconn's manufacturing from last year, however, which resulted in "glitches" with the iPhone 5 such as scratches on the metal casings. These setbacks, along with Apple's purported decision to expand product lines, apparently forced Apple to look at other manufacturers.
Pegatron has about 100,000 employees in Taiwan and China, but analysts, who spoke to The Wall Street Journal, expect the company to increase its China workforce later this year by around 40 per cent. The analysts further said Pegatron's staffing increase was likely due to the production of low-cost iPhones, and that Pegatron was willing to accept "thinner profits as it courts Apple's business".
Rumours, as well as alleged leaks, suggesting that Apple is working on a budget iPhone for the second-half of 2013 have long persisted. Many reports indicate it is a 4-inch plastic device, and so a slew of design concepts, such as the one above, have added colours to that form factor and surfaced online.