Apple Inc. (AAPL)’s ‘Cheap iPhone’ Will Not Be Cheap: Pegatron CEO

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Apple Inc. (AAPL)’s ‘Cheap iPhone’ Will Not Be Cheap: Pegatron CEO
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Pegatron CEO T.H. Tung said that the Apple Inc. (NASDAQ:AAPL) low priced iPhone will not be a cheap phone rather it will be a higher end middle tier device. According to China Times, Tung denies that the upcoming offering from the Apple Inc. (NASDAQ:AAPL) will be a low end phone and said “price is still high.”

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Apple Inc. (AAPL)'s 'Cheap iPhone' Will Not Be Cheap: Pegatron CEO

Prior to Tung, analysts Gokul Hariharan and Mark Moskowitz said that the low cost iPhone from Apple can come with a price tag of $350 according to the report of AllThingsD.

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Price Never A Concern

The $350 price tag is not very unusual when it comes to Apple Inc. (NASDAQ:AAPL). The phone maker does not compete with its rivals on price. For instance, the iPad mini, which was priced at $329, was considered as highly priced compared to other tablets.

Tim Cook while speaking at Goldman Sachs Technology and Interactive Conference said that the company was making great products, and it will never compromise with something that is not great. That is not the reason why they are on this Earth. He said that the price of iPhone4 and 4S was lowered for those who could not afford them at a high price.

Who Will Manufacture The Device

It has become clearer that Pegatron Corporation (TPE:4938) is one of the part suppliers of the not yet declared iPhone manufacture. In May, a report was released where Pegatron was believed to hire 40,000 workers in the second half of 2013, which further confirmed that Apple is making a low priced iPhone.

There is no clarity amongst the analysts and the media regarding the major partner of Apple Inc. (NASDAQ:AAPL). However, some hold the view that Foxconn is the one to manufacture most of the device.

Ming-Chi Kuo, an analyst with KGI said that the manufacturing will be divided between two companies for the lower end phones of Apple. In the production of iPhone 4 and 4S Pegatron will take a greater share.

Apple Preferring Pegatron

In recent times, Apple Inc. (NASDAQ:AAPL) seems to believe Pegatron more and transferring some of its manufacturing process from Foxconn Technology Co., Ltd. (TPE:2354) to Pegatron Corporation (TPE:4938). Apple wants to end up its dependence on a single supplier. According to the report of Wall street Journal, Pegatron will get the position of major assembler of the low cost iPhones.

According to some reports the shape of the low priced iPhone will be like the iPhone 5 and curves and the elements will be similar to iPod touch. There have also been reports that the low priced iPhone will be available in various colors.

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Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at amanjain@valuewalk.com
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