Pegatron reported intentions to increase staff involved in production by 40% . Currently Pegatron produces older models of smartphones (iPhone 4 and iPhone 4S), as well as the iPad mini.
Reuters experts, however, do not believe that the increase in the Pegatron state have to be associated with the preparations for the start of low-cost iPhone model production with plastic case. This contractor simply pulls on additional Apple orders, as Hon Hai Precision Industry (aka Foxconn) can no longer oppose former competitor attractive prices. A series of scandals with difficult working conditions in the factories Foxconn forced the contractor to raise the salaries of the staff, and this is reflected in the cost of services for Apple company . Earnings growth rate of the latter, as shown by the recent quarterly report, seriously slowed down . Worst of all, the rate of profit has decreased compared to last year.
Pegatron is interested in increasing the orders volume, and Apple is working to reduce costs. Moreover, that the production of iPad mini is already made with Pegatron, and this product has a much lower margin than other Apple products . It is possible that Apple will now trust Pegatron production most of its products.