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The addition of 40,000 Chinese workers could mean that the low cost Apple iPhone is coming

Posted: , by Alan F.

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The addition of 40,000 Chinese workers could mean that the low cost Apple iPhone is coming
Yesterday we told you that Taiwan based Pegatron expects its consumer electronics revenue to decline 25% to 30% in the current quarter due to lower demand for the Apple iPad mini. But despite falling top-line numbers, the manufacturer told Reuters that it plans on increasing revenue by 40% in China during the second half of the year. Considering that the company currently employs about 100,000 people in China, that would work out to the addition of 40,000 employees. The addition of those workers is heating up speculation that Apple is about to introduce a low-cost version of the Apple iPhone.

Apple's suppliers have been spreading the word that the company has developed a cheaper model of its iconic smartphone that will be sold in emerging markets like India and China. Earlier on Thursday, we told you that Apple has the fifth largest market share among smartphone manufacturers in China with 8% of the market. If Apple can add to its market share in the country and in India, it can help its bottom line, which is currently in need of a boost. Apple isn't the only company that would receive a shot in the arm from selling a cheaper version of the iPhone. Fubon Securities analyst Arthur Liao pointed out that the plastic casing expected on a low-cost Apple iPhone model would be easier to produce than the metal casing on the iPhone 5 which should allow for a good yield rate for Pegatron, and give the company an edge over rival manufacturer Hon Hai in profitability.

Meanwhile, Pegatron CFO Charles Lin said on Thursday that 60% of the company's annual revenue will be collected in the second half of the year, but failed to disclose if a low-cost Apple iPhone model would be one of the products it will manufacture during those 6 months. Yesterday, Pegatron President and Chief Executive Officer Jason Cheng, told an investor conference that revenue from communication products would make up 40% of the company's revenue in the second half of this year compared to 24% in the first quarter.

"Making the cheaper iPhone will further help Pegatron's operating margin because its plastic casing is easier to make than iPhone 5's metal casing; this should ensure a good yield rate."-Arthur Liao, analyst, Fubon Securities.

source: Reuters

9 Comments
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posted on 09 May 2013, 16:21 1

1. darkkjedii (Posts: 9349; Member since: 05 Feb 2011)


Or the math

posted on 09 May 2013, 16:23 2

2. funnyguy (Posts: 208; Member since: 10 Jan 2013)


20% of those Chinese workers will probably commit suicide jumping of the roof ....
So the price of the cheap iPhone will be a little higher than expected and the availability a little limited.

posted on 09 May 2013, 17:45 1

3. darkkjedii (Posts: 9349; Member since: 05 Feb 2011)


Such class

posted on 09 May 2013, 17:59

4. som (Posts: 768; Member since: 10 Nov 2009)


I wish those jobs were create in the America by Apple. American consumers wanted cheaper products so those will never come back to America. Only Samsung created jobs some jobs in America and Apple created jobs in Head Quarter and Apple Stores but no manufacturing jobs which Apple made giant profit every quarter.

posted on 09 May 2013, 18:43 2

5. AMDPhenomX4 (Posts: 48; Member since: 06 Apr 2013)


How does 40% more revenue mean hiring 40% more people. It doesn't even say that in the reuters article.

posted on 09 May 2013, 19:25

6. skymitch89 (Posts: 984; Member since: 05 Nov 2010)


40% increase in revenue doesn't mean 40k more workers. It means that they plan to have more products sold than they currently are to increase their revenues.

posted on 09 May 2013, 20:33

7. medicci37 (Posts: 554; Member since: 19 Nov 2011)


Or it means that suicides are way up at Pegatron

posted on 09 May 2013, 20:41

8. mydi.maus (unregistered)


is it a plastic iphone? like gs4.

posted on 10 May 2013, 05:01

9. Daftama (Posts: 547; Member since: 03 Nov 2012)


What do you mean cheap model...companies are still selling 4 and 4s whic is selling more than i5...dont make sense for chea phone when older model are selling

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