Apple Inc. (APPL) Budget iPhone Updates: Photo Leaked, Reports on Primary Manufacturer

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By Athena Yenko | June 3, 2013 1:52 PM EST

Photo Leaked

 A rumored photo of the much awaited cheaper version of iPhone, the Budget iPhone, was reportedly leaked by Chinese micro-blogging site, Weibo. The photo leaked showed a mobile unit facing backwards. The shape has striking resemblance with the iPhone and the unit also had two of the common trademark of the iPhone: lighting connector and 3.5mmm jack. However the leaked photo did not give any tempting information about the budget iPhone's specs and other particulars.

 Primary Manufacturer

 Apple Inc. had reportedly taken the monopoly from Foxconn as the biggest manufacturer of Apple's mobile products, The Wall Street Journal reported. Foxconn Technology Group or Hon Hai Precision Industry Co., is the world's major contract manufacturer and was the sole producer of Apple's mobile units in the past years.

 According to the report, Pegatron Corp., a company keenly dubbed after the flying horse Pegasus, will be the primary manufacturer of the budget iPhone which was set to be launched later this year.

 Analysts said that the shift to Pegatron was a smart move for Apple Inc. since Foxconn had caused major glitches to iPhone 5 which caused "scratches on the metal castings." Also, this move was predicted to boost Apple's performance against Samsung Electronics Co.

 Also, according to analysts, Apple was never hesitant to make the decision because Pegatron was willing to accept small percentage of profits from Apple.

 Although Pentagon may seem to be an amateur compared to its competitor Foxconn, Apple had long been trusting Pegatron. Pegatron had been manufacturing iPhones in minimum amounts since 2011 and had been involved in the assembling of iPad Mini tablet in 2012. However, Foxconn still took the bulk of the production of the iPad Mini tablet last year.

 Ten years ago, Pegatron was able to come up with a smart solution in packaging for Apple computers despite a power shortage in Taiwan.

 Pegatron Senior Vice President Andy Tsai shared, "At that time, there were a lot of Apple people in my factory, telling us to find a solution. I bought a lot of power generators, and we even used candles on the packing line."

 KGI Securities Analyst Angela Hisang said that with Apple's shift with Pegatron, the bulk of Pegatron's profit will be coming from Apple. She was hoping that Pegatron will be able to take the bulk of manufacturing iPad Minis this year and of course the much awaited budget iPhone.

 Although Pegatron's reported revenue ( US$7.4 Billion) in the first quarter was considerably lower compared to Foxconn's revenue (US$27.3 billion), Foxconn spokesman Simon Hsing admitted that Foxconn is "in the midts of a challenging period."

 Mr Hsing said that "We are transforming the business and expanding in areas like e-commerce."

 As Pegatron became known in the market for being Apple's trusted supplier, the company was predicted to be facing criticism over its labor practices brought about by a factory explosion in 2011.

 Chief Financial Officer Charles Lin said that Pegatron has 100,000 employees both in Taiwan and China, but, with the recent contract with Apple, the company is planning to hire more employees come mid-year.

 Analysts said that Pegatron is increasing its employees to be able to handle the production demands of the upcoming budget iPhone.

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