Apple is reportedly stepping away from its primary manufacturer as plans for a low-cost iPhone are underway.
According to the Wall Street Journal, the Cupertino-based organization will utilize supplier Pegatron Corp. instead of Foxconn ahead of the low-cost iPhone's launch later this year. Pegatron Corp. is not an unfamiliar manufacturer for Apple as it has produced iPhones in 2011 and the iPad mini last year.
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"People familiar with the matter point to strategic reasons for the shift: risk diversification after Foxconn's manufacturing glitches last year with the iPhone 5 that resulted in scratches on the metal casings, and Apple's decision to expand its product lines amid growing competition from Samsung Electronics Co. and others," reported WSJ's Eva Dou.
Analysts have noted that the move to Pegatron Corp. comes as the manufacturer is offering to accept smaller profits compared to Foxconn.
Chief Financial Officer Charles Lin stated Pegatron Corp. has about 100,000 employees in China and Taiwan, but is expected to increase its workforce in China by 40 percent during the later half of this year. The timing for the employment boost may fuel speculation of the low-cost iPhone's production timeline. Apple has so far declined to comment.
As Latinos Post previously reported, Citi Research analyst Glen Yeung stated in a note to investors that the low-end iPhone may come in September and could sell up to 15 million units.
While appearing on Bloomberg TV, Jefferies & Co. analyst Peter Misek commented that the low-budget Apple smartphone's features include a 4-inch screen, low-grade processor, and a lower NAND memory count.
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