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 newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags iPadsmartphonestabletsAppleiPhonehardware systemsconsumer electronicsCapitaPegatron

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

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Jack Jeffries

MSI GS75

As the Maserati or BMW of laptops, it would fit perfectly in the hands of a professional needing firepower under the hood, sophistication and class on the surface, and gaming prowess (sports mode if you will) in between.

Taylor Carr

MSI PS63

The MSI PS63 is an amazing laptop and I would definitely consider buying one in the future.

Christopher Low

Brother RJ-4230B

This small mobile printer is exactly what I need for invoicing and other jobs such as sending fellow tradesman details or step-by-step instructions that I can easily print off from my phone or the Web.

Aysha Strobbe

Microsoft Office 365/HP Spectre x360

Microsoft Office continues to make a student’s life that little bit easier by offering reliable, easy to use, time-saving functionality, while continuing to develop new features that further enhance what is already a formidable collection of applications

Michael Hargreaves

Microsoft Office 365/Dell XPS 15 2-in-1

I’d recommend a Dell XPS 15 2-in-1 and the new Windows 10 to anyone who needs to get serious work done (before you kick back on your couch with your favourite Netflix show.)

Maryellen Rose George

Brother PT-P750W

It’s useful for office tasks as well as pragmatic labelling of equipment and storage – just don’t get too excited and label everything in sight!

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?