Apple says 'zai jian' to Foxconn, taps Pegatron for new iPhones Apple plans to widen its supply chain for its next-generation iPhone to include manufacturers other than just longtime partner Foxconn, sources say. The Wall Street Journal reported on Wednesday that the fruity firm has named Taiwanese electronics manufacturer Pegatron the primary assembler of a new, lower-cost version of its …
Pegatron will do it cheaper, that's the real reason for the change, Chinese workers are demanding too many concessions such as better pay, better conditions and would you believe it a shorter working week and regular breaks.
It won't be long before they open a factory in the UK because of our 'flexible labour market' and the expected influx of cheap labour from Romania and Bulgaria at the end of the year.
This is just not on.
the expected influx of cheap labour from Romania and Bulgaria
What expected influx? The UK doesn't have the kind of manufacturing industry that would benefit from such an influx which, therefore, unlikely to happen. Romania already has a reasonably well-established outsourcing sector for car and garment makers. There is still demand for low-paid, low-skilled workers in agriculture and the service industry but there have been reports that EU migrants are starting to avoid Britain because pay is too low.
Do they mean making the existing model at a lower cost or new model with a reduced feature set?
Not sure what features you could remove from an iphone 5, it's already lagging behind recent phones from other manufactuers. So unless it's a model for developing markets such as Africa I can't see much point.
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I recently freed myself from another iPhone mortgage. Got a Nexus 4 and a giffgaff deal, and I am now lightly flagellating myself with a proprietary cable wondering why I didn't do something similar before.
I'm really not sure what can be taken out to make a 'basic' fruitphone - it's only since switching that I've appreciated what spartan functionality it really had in comparison to other devices. In that respect, it may represent even less value for money, which sort fails its raison d'etre, yes?
Nexus 4 16Gb (£279) - iPhone 5 16Gb (£529) - so £240 less - i.e. should work out about £10 per month cheaper over a 2 year contract - hardly a mortgage unless you live in a shed? Then factor in that your £529 iPhone 5 will probably still be worth £250-300 in 2 years time and what's the real difference in cost = bugger all.
"i.e. should work out about £10 per month cheaper over a 2 year contract - hardly a mortgage unless you live in a shed?"
Spare cash all varies by the pay cheque, my fruity friend. £10 here and there makes a difference to many. Besides, what if one doesn't want a contract and the shackles that come with? That was my point, the outright 'I own it' jump-in cost of a Nexus 4 is considerably more realistic for myself and many others. Then, I'm not faced with ~£40 of Apple tax a month, but a more manageable £12. I don't care if the cost is spread with the iPhone contract. I don't want one! Is that a good enough reason to not get it?
"Then factor in that your £529 iPhone 5 will probably still be worth £250-300 in 2 years time and what's the real difference in cost = bugger all".
Yes, it may be worth more in 2 years, but has less functionality for me *now*. I don't tend to buy phones to immediately start thinking of giving them away, in general.
The issue is actually that many people cannot afford the up front cost of modern smart phones - hence they pay for it over 2 years as part of a contract. Again you fail to compare like for like - saying around £40 'Apple tax' and instead you pay £12 - missing the point that you paid £280 up front for the phone! Your £40 is also (unsurprisingly) on the high side - Three's most expensive 'One' contract is 2000 minutes, 5000 texts and unlimited data including tethering for £36/month (SIM only that is £25/month - so you are effectively paying £11/month for the iPhone).
However, if you want to pay your £12/month for your calls, texts and data well you could do that with an iPhone - what it then comes down to is do you want to pay £279 for the Nexus 4 up front or £529 for the iPhone 5 up front. But I do tend to look at the total cost of ownership - so if my £529 iPhone is still worth perhaps £250-300 in 2 years time so I can trade in against my next phone the actual difference in cost of ownership of your Nexus 4 vs my iPhone 5 is probably very little.
I am not sure I agree with the argument here. You get a phone that costs you £250 less does the same job with a more advanced ui... where is the down side?
Even if you look at contracts which change every 5 seconds. I got my phone from Three for £550 with 2 year warranty and then took a 12 month contract @15/month with millions of minutes and texts and unlimited data (I used over40GB in my first two weeks). And £5/m insurance. I saved nowt vs contract, except I don't have to find 20 more pounds a month and I can change contracts in 12 months. How ever I could of gone pay as u go, but in my case that was no use.
If however I wanted an iphone alternative (rather than the note 2) I would be very happy to have the other phone at 280, and I would consider an upgrade in 12 months to the next shiney.. and I suspect if I were to sell it I would get around £100 back.
I suppose what I am saying if the iphone 5 offers me no benefits, why on earth will I pay more for it other than for the brand.
"Pegatron is reportedly willing to accept thinner margins than Foxconn in order to win over Apple's business."
Where is this reported?
"According to reports, its [Pegatron] production yield for iPad Minis last year was lower than expected"
Where is this reported?
Note all the article is about screwing price (not cost) from suppliers. Unlike every other major electronic supplier Apple do not compromise margin to them. Eventually they run out of people to get the price reductions from. The changing of component suppliers is a regular thing, now that Foxcon cannot invest in manufacturing capacity and reduce the price they go somewhere else for the build, heaven help the guys at Foxcon
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