Low-cost iPhone to be built by Foxconn rival Pegatron, reports

Pegatron offers aggressive pricing in deal that could help Apple's margins

Foxconn's days as Apple's primary manufacturing partner may be numbered. Rival Pegatron is said to be offering more competitive pricing to tempt Apple, who is trying to increase its margins.

According to Business Insider, Foxconn gets 60-70% of its revenue from Apple contracts.

Pegatron is thought to be gearing up to be the sole assembler of the rumoured budget iPhone. Last week the company announced that it was planning to increase the number of workers in its factory by 40 per cent.

Pegatron is able to offer aggressive pricing "because as it catches up on margins by supplying more components," Daiwa Capital analyst Birdy Lu told Business Insider.

Speaking at the recent conference call with analysts at which Apple announced its second quarter financial results, Apple CEO Tim Cook said: "We acknowledge that our growth rate has slowed and our margins have decreased from the exceptionally high level we experienced in 2012."

One of the concerns about launching a low-cost iPhone - which many claim Apple needs to do if it is to take on the emerging markets of China and India - is that it will mean that Apple's profit margins decline. The company has already seen margins reduce since it launched the iPad mini.

In addition, component costs have risen in 2013 compared to 2012, making it much more difficult for Apple to achieve the profit levels that it used to.

Follow Karen Haslam on Twitter / Follow MacworldUK on Twitter

Related:

Another Apple partner ramps up staff, fuelling rumours of budget iPhone

Budget iPhone mini to cost £226, will launch this year, reports

Allegedly leaked photos, price and launch date of Apple's budget iPhone emerge

Low-cost iPhone mini release date, rumours and leaked images

iOS 7 to be 'very, very flat,' with redesigned Apple app icons and more, report says

Will Apple make a Phablet? Donald Trump thinks is should...

Join the PC World newsletter!

Error: Please check your email address.

Tags PegatronAppleconsumer electronicssmartphoneshardware systemsiPhonetabletsCapitaiPad

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Karen Haslam

Macworld U.K.
Show Comments

Essentials

Microsoft L5V-00027 Sculpt Ergonomic Keyboard Desktop

Learn more >

Lexar® JumpDrive® S57 USB 3.0 flash drive

Learn more >

Mobile

Lexar® JumpDrive® S45 USB 3.0 flash drive 

Learn more >

Exec

Lexar® JumpDrive® C20c USB Type-C flash drive 

Learn more >

Audio-Technica ATH-ANC70 Noise Cancelling Headphones

Learn more >

HD Pan/Tilt Wi-Fi Camera with Night Vision NC450

Learn more >

Lexar® Professional 1800x microSDHC™/microSDXC™ UHS-II cards 

Learn more >

Budget

Back To Business Guide

Click for more ›

Most Popular Reviews

Latest News Articles

Resources

PCW Evaluation Team

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Aysha Strobbe

Windows 10 / HP Spectre x360

Ultimately, I think the Windows 10 environment is excellent for me as it caters for so many different uses. The inclusion of the Xbox app is also great for when you need some downtime too!

Mark Escubio

Windows 10 / Lenovo Yoga 910

For me, the Xbox Play Anywhere is a great new feature as it allows you to play your current Xbox games with higher resolutions and better graphics without forking out extra cash for another copy. Although available titles are still scarce, but I’m sure it will grow in time.

Kathy Cassidy

STYLISTIC Q702

First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.

Anthony Grifoni

STYLISTIC Q572

For work use, Microsoft Word and Excel programs pre-installed on the device are adequate for preparing short documents.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?