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40,000 Chinese workers say low-cost iPhone coming soon

Massive hiring push by iPhone builder fuels speculation

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The manufacturer of the still-popular iPhone 4S has said that it plans to add 40,000 workers, boosting rumors that Apple plans to release an entry-level iPhone soon.

Taiwan-based Pegatron, which has manufacturing plants in Taiwan, mainland China, Mexico, and the Czech Republic, told Reuters that it plans to increase its Chinese workforce by 40 per cent in the second half of this year. Seeing as how Pegatron employs about 100,000 in China, the math is rather straightforward.

Rumors of a low(er)-cost iPhone targeted at emerging markets such as China and India have been simmering for some time now, and such a massive increase in manufacturing capability by one of Apple's most prominent handset assemblers stirs the pot of speculation even more energetically.

In addition, Pegatron CFO Charles Lin told Reuters that his company would book 60 per cent of its annual revenue in the second half of the year – although, of course, he could not be drawn out on whether that increase would be due to the manufacture of a mid-market Apple smartphone.

Lin apparently wants to keep his job.

He did, however, note that PC shipments are expected to increase during that period due to Intel's introduction of its next-generation "Haswell" processors. But will that ramp-up require 40,000 new workers? Unlikely.

More evidence of the possibility of the imminent release of a budget iPhone comes from Pegatron president and CEO Jason Cheng, who told an investors confab that revenues from communication products would rise to 40 per cent of company revenues in the second half of the year, up from 24 per cent during the most recent quarter.

Various sources have said that early production runs of the plastic-backed, entry-level iPhone are to begin this month, with full-scale production set to ramp up in June. That would be just about the right time for Apple to announce the li'l fellow – and possibly a flagship iPhone 5S and iOS 7 – at its Worldwide Developers Conference, scheduled to be held in San Francisco on June 10-14. ®

Bootnote

Pegatron also manufactures Apple's iPad mini. In response to a Bloomberg report that said he had told them that iPad mini orders were drooping, Cheng told CNNMoney that his remarks had been misinterpreted.

Referring to his conversation with Bloomberg reporter Tim Culpan, Cheng said, "I did not say anything associated with any specific products," and that his company's recent consumer-electronics revenue decline had been the result of slackening sales, as Culpan correctly quoted, in "Not just tablets, also e-books and games consoles – almost every item is moving in a negative direction."

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