Pegatron CEO: Apple's 'low-cost iPhone' will not be cheap

Posted:
in iPhone edited January 2014
Speaking at his company's shareholders meeting on Thursday, Pegatron CEO T.H. Tung said Apple's much rumored low cost iPhone won't be a budget offering, seemingly confirming speculation that the handset will be sold as a higher-end middle tier device.

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Tung disagreed with rumors that called Apple's lower-end offering "cheap," saying the "price is still high," reports the China Times (via Mac Otakara).

The executive said products currently on the market can carry a number of names, but "cheap" is not one that should be associated with Apple's less expensive iPhone. He went on to say that, compared to feature phones, smartphones are increasingly offering more value for the price.

The statements appear to confirm previous reports that Pegatron is handling at least a portion of the as-yet-unannounced iPhone's manufacture. A report in May claimed Pegatron is reportedly preparing to hire some 40,000 workers sometime in the second half of 2013, adding fuel to the low-cost iPhone fire.

Analysts and media sources are divided as to which of Apple partners will be responsible for the majority of production, with some claiming Foxconn is to pull most of the burden.

KGI analyst Ming-Chi Kuo in March said the two companies will nearly split manufacturing duties for the low-cost version, while Pegatron would take on a bigger share of continued iPhone 4 and 4S production.

On Wednesday, AppleInsider offered a first look at 3D renderings of so-called "iPhone Lite," which were made by a well-known third-party case maker from schematics it received. If the blueprints are authentic, the new design boasts curved edges and a slightly thicker frame than the current iPhone 5, which is in line with previous rumors.
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Comments

  • Reply 1 of 70
    applesauce007applesauce007 Posts: 1,672member
    It will probably cost $99 with a contract.
    Similar price ration as the iPad Mini to the iPad.
    It will sell like crazy...

    Gotta keep a healthy margin.
    Time will tell.
  • Reply 2 of 70
    ifij775ifij775 Posts: 470member
    If you thought it was going to be cheap, you haven't been paying attention
  • Reply 3 of 70
    jmgregory1jmgregory1 Posts: 470member
    Just like Apple mopped up the competition when it offered a broad range of iPods, they're going to do the same when they broaden the iPhone offering. It doesn't really matter what they do hardware-wise, as long as the consumer experience is no different, or rather no less, than any other iOS device.
  • Reply 4 of 70
    lun_esexlun_esex Posts: 27member


    Do we have to go through the same thing again as we went through with the rumors on the price of the iPad Mini, before it was announced?


     


    You'd think everyone would have figured out by now that Apple doesn't do "cheap." Instead they just do "less expensive" ...than their previous or existing similar product.

  • Reply 5 of 70
    airbubbleairbubble Posts: 105member


    What Apple will be doing is shifting most of internal parts of 4S to the new body containing new connector Lightning so


    you get one whole happy family in connection, Bluetooth & maybe Wi-Fi. 

  • Reply 6 of 70
    the iPod touch (w/camera) is $299. The iPhone won't go below that. The current iPhone is $649... If the low-cost iPhone comes in at $449, I'd say that would hit the target. They would be able to retire the 4 & 4S, and sell this one free on contract. Plus, it would put 4" displays across the board.
  • Reply 7 of 70
    irelandireland Posts: 17,751member
    When people said it will be cheap they meant in comparison to the 5, which unlocked here costs €679 ($900) for the 16 GB model.
  • Reply 8 of 70
    irelandireland Posts: 17,751member
    the iPod touch (w/camera) is $299. The iPhone won't go below that. The current iPhone is $649... If the low-cost iPhone comes in at $449, I'd say that would hit the target. They would be able to retire the 4 & 4S, and sell this one free on contract. Plus, it would put 4" displays across the board.

    Whatever pricing it is, your thinking makes sense. They need to obliterate 3.5" displays ASAP.
  • Reply 9 of 70
    irelandireland Posts: 17,751member
    lun_esex wrote: »
    Do we have to go through the same thing again as we went through with the rumors on the price of the iPad Mini, before it was announced?

    You'd think everyone would have figured out by now that Apple doesn't do "cheap." Instead they just do "less expensive" ...than their previous or existing similar product.

    You're saying what everyone knew. It was only the analysts who were "confused" or messing with the stock market.

    Possible statement from a Wall St. analyst: "My wife has 1M shares in AAPL. What's that got to do with me?"
  • Reply 10 of 70


    The 4 and 4S are old phones by now so people can stop saying "they already have a cheaper phone in the 4 and 4s, no need to do this".  The 4/4s already target the middle tier so I see this as just a replacement of those models but with a larger appeal to emerging markets.  I just hope the cannibalization rate is not too high like we saw with the mini and margins go down further.  Hope when they announce these new phones that they announce a deal with CM at the same time but I am starting to think that deal will never happen. 

  • Reply 10 of 70


    The 4 and 4S are old phones by now so people can stop saying "they already have a cheaper phone in the 4 and 4s, no need to do this".  The 4/4s already target the middle tier so I see this as just a replacement of those models but with a larger appeal to emerging markets.  I just hope the cannibalization rate is not too high like we saw with the mini and margins go down further.  Hope when they announce these new phones that they announce a deal with CM at the same time but I am starting to think that deal will never happen. 

  • Reply 12 of 70
    blackbookblackbook Posts: 1,361member
    My only hope is that the design would be more unique than just a plastic back.

    If it is plastic there are unique and creative things Apple could do with the design and shape to make it unique from the main iPhone.

    Maybe they could make shrink the top and bottom bezels of the device in the same way the iPad Mini shrunk the side bezels for the iPad?

    Maybe a tear drop design? They could feasibly make this phone thinner than the 5. iPhone Air maybe?

    If it just looks like a 3GS that could be a missed opportunity.
  • Reply 13 of 70
    rogifanrogifan Posts: 10,669member
    Are we buying this story? Would the Pegatron CEO really disclose something like this publicly? I can't imagine Apple would be too keen on him blabbing Iike this. Aren't these companies under NDA's?
  • Reply 14 of 70
    rogifanrogifan Posts: 10,669member
    blackbook wrote: »
    My only hope is that the design would be more unique than just a plastic back.

    If it is plastic there are unique and creative things Apple could do with the design and shape to make it unique from the main iPhone.

    Maybe they could make shrink the top and bottom bezels of the device in the same way the iPad Mini shrunk the side bezels for the iPad?

    Maybe a tear drop design? They could feasibly make this phone thinner than the 5. iPhone Air maybe?

    If it just looks like a 3GS that could be a missed opportunity.

    iPad mini isn't plastic. None of the iPods are plastic. Not sure why a lower cost iPhone would have to be plastic.
  • Reply 15 of 70
    iaeeniaeen Posts: 588member
    applehawk wrote: »
    [SIZE=10pt]The 4 and 4S are old phones by now so people can stop saying "they already have a cheaper phone in the 4 and 4s, no need to do this".  The 4/4s already target the middle tier so I see this as just a replacement of those models but with a larger appeal to emerging markets.  I just hope the cannibalization rate is not too high like we saw with the mini and margins go down further.  Hope when they announce these new phones that they announce a deal with CM at the same time but I am starting to think that deal will never happen. [/SIZE]

    How does the 4/4s being old make that argument invalid? For that matter, how does putting 4/4s components in a different case make a new phone?

    I can see an argument for apple redesigning the 4s to eliminate the smaller screen and 30 pin connector, but that's a one time deal. I simply cannot understand people who think apple should spend time and money redesigning and revamping production lines for products that they already have on shelves.
  • Reply 16 of 70
    pokepoke Posts: 506member


    I think this is just a replacement for the 4S that has a 4 inch display and a lightning connector. The line-up will be this/5/5S instead of 4S/5/5S. It's so they can use the same displays and have everything on the lightning connector, nothing else.

  • Reply 17 of 70


    IMO - to continue to stay relevant any company needs to tweak their products from time to time.  Just continuing to sell a phone that is 2+ years old does more harm to apple.  I am sure there will be additional upgrades in the new phone than just swapping out 4/4s components and replacing them in the new phone.  We are all seeing what selling a large amount of 4/4s models now are doing to their margins so I am assuming that apple knows what they are doing and the new phone will sport healthier margins than what the 4/4s currently is giving them.

  • Reply 18 of 70
    geekdadgeekdad Posts: 1,131member

    Quote:

    Originally Posted by OllieWallieWhiskers View Post



    the iPod touch (w/camera) is $299. The iPhone won't go below that. The current iPhone is $649... If the low-cost iPhone comes in at $449, I'd say that would hit the target. They would be able to retire the 4 & 4S, and sell this one free on contract. Plus, it would put 4" displays across the board.


    That makes sense.....we know if Apple makes it it won't be cheap.......they might have a lower priced offering...but not cheap as in lower standards....

  • Reply 19 of 70
    blackbookblackbook Posts: 1,361member
    rogifan wrote: »
    iPad mini isn't plastic. None of the iPods are plastic. Not sure why a lower cost iPhone would have to be plastic.

    The options for an iPhone would either be plastic or glass.

    Cellular signals don't go through aluminum. So we could see an aluminum device with a plastic "window" for the wireless signals much like the iphone 1. Or we could see an entirely plastic back like the 3G/3GS.

    Glass is also a possibility. We could see a deosgb similar to the 4/4S, but production costs may be an issue at that point.

    It all depends if Apple is going for a $399ish price or a $499ish price. Both would stil quantify as "low-cost" by Apple standards but the price determines what materials etc to expect.
  • Reply 20 of 70
    geekdadgeekdad Posts: 1,131member

    Quote:

    Originally Posted by blackbook View Post





    The options for an iPhone would either be plastic or glass.



    Cellular signals don't go through aluminum. So we could see an aluminum device with a plastic "window" for the wireless signals much like the iphone 1. Or we could see an entirely plastic back like the 3G/3GS.



    Glass is also a possibility. We could see a deosgb similar to the 4/4S, but production costs may be an issue at that point.



    It all depends if Apple is going for a $399ish price or a $499ish price. Both would stil quantify as "low-cost" by Apple standards but the price determines what materials etc to expect.


    I am not sure about the aluminum part...there are phones on the market that are aluminum that have no signal issues.


    I agree with you on the 3G/3GS and the plastic backs...they could be similar to that.....

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