Cheaper iPhone Might Be The Reason For Pegatron Staff Boost
A few days ago we tried to analyze and provide an answer to the question: Is a cheaper iPhone necessary? There have been many rumors about a supposed low cost iPhone but we also tried to understand Apple’s point of view regarding the need of a new hardware dedicated to the low to mid range market, the context here being that Apple already has a share of this particular market niche as their older iPhone models (the iPhone 4 and the iPhone 4S) sell well. We concluded that while the older iPhone models do well to capture the low budget audience in the US and other mature markets, Apple might see value in a low cost iPhone aimed at emergent markets such as Africa, India and China (together, these two countries have over 2 billion people so there are many potential customers). While the average person in some of these markets can barely make enough money for day to day life, the middle class will be able to afford a $99 iPhone and so they are an interesting market to exploit.
Now there is a new report that is consistent with the low cost iPhone rumors aimed at emergent markets. It would seem that Apple suppliers have had very large hiring campaigns and the reason for this huge need of personnel seems to be exactly a low cost iPhone. One of these suppliers (quite an important Apple supplier actually, assembling both iPhones and iPads for the Cupertino based company) is the Taiwanese electronics manufacturer Pegatron. The Taiwanese manufacturer predicted low performance during this year’s second quarter (the reason being a drop in iPad mini sales apparently), but not long after the prediction Pegatron hired a large percent of workers. Behind the staff boost, the Taiwanese manufacturer had around 100,000 employees. The staff boost is said to be of about 40% (and it refers to Pegatron’s Chinese staff) which would rise the current number of Pegatron employees to 140,000. It is a considerable increase in staff and, as explained below, the main reason seems to be a new, low cost, iPhone model.
Reuters received information from anonymous sources working at Apple’s suppliers, that the recent between the recent staff boosts is a low cost iPhone. According to these sources, Apple is making a cheaper iPhone that would be launched exactly in the emergent markets we talked before (Africa, India and China) where there is a high customers base. Another anonymous source, from a Japanese supplier) confirmed that the low cost iPhone’s display will enter small scale production this month and mass production next month, in June. The low cost iPhone will apparently be launched with the same 4 inch screen that the current iPhone 5 has.
As the rumors about the cheaper iPhone model increase, the odds of it becoming a real product also increase. We are interested what specs this iPhone model will have; some analysts suggest that it will probably be a mid range iPhone priced between two hundred dollars and five hundred dollars (unlocked, of course) and it is also believed that it would seriusly hurt Samsung’s business on the US market, as Samsung is very active on the low to mid range budget market. However there is also the possibility that we suggested, that this low cost iPhone will be aimed exclusively at emergent (and very promising) markets, such as China, India and Africa.
