One of Apple's primary assembly partners has announced that it will increase its Chinese workforce by 40 percent "low-cost" iPhone model
, hiring 40,000 more workers during the second half of the year to help meet demand for the forthcoming (but unannounced) "low-cost" iPhone model. The alleged new model, which is thought to be debuting later in the year, would be aimed at lower-income buyers in developing markets such as China and India but could be sold elsewhere. Sources say small scale production of the phone has already started, with a ramp-up beginning in June.
The "budget" iPhone has been speculated to have a plastic construction not dissimilar to the well-regarded iPhone 3GS, but include most of the modern features that make up the iPhone. Details are obviously scarce, but the device is thought to be priced in the mid-range level
, meaning somewhere between $200-$400 without contract.
The low-cost model would likely have some limitations to keep it from cannibalizing sales of the premium iPhone 5 -- for example, no LTE/4G radio, a lower-resolution camera module, be generally bulkier and possibly limited to running iOS 6 -- leaving the redesigned iOS 7 for buyers of the full-price (or contract) iPhone 5. Pundits have speculated that were such a budget iPhone released in the North American market, it would hurt Samsung's already-struggling efforts
to push its Galaxy S4 flagship in the lucrative US market, and possibly lead to further losses in the already-unprofitable
low end cellphone market.
Pegatron's CFO told reporters that he expects up to 60 percent of the company's 2013 revenue to be made in the second half, suggesting that Apple expects this new iPhone model -- and perhaps other devices, as Pegatron also helps assemble the iPad as well -- will be a significant part of the holiday buying season. Though he did not specifically comment on a so-called "low cost" iPhone, he added that other products using Intel's latest "Haswell" line of chips
would also comprise some of Pegatron's output.
The company expects its profit margin for 2013 to nearly triple, which suggests that the products the company will be assembling for Apple and others will likely be less expensive to build and have higher yields of certification than, as an example, the iPhone 5 -- which Foxconn Chairman Terry Gou once described as "the most difficult device that [the company] has ever assembled."