Pegatron making 10m initial iPhone 5s, all-out for iPhone 4
Pegatron has already earned enough trust from Apple to start manufacturing the iPhone 5, part makers said Monday night. The company is due to make at least 10 million to 12 million CDMA iPhone 4 units but has reportedly been picked …
Context & Ripple Effects
The move caps a three-month arc: DigiTimes sources said back in October 2010 that Pegatron expected to ship 10 million CDMA iPhones in 2011, and this week part makers confirm the company has earned enough trust from Apple to take on an initial run of roughly 10 million iPhone 5 units — while going "all-out" on at least 10 to 12 million CDMA iPhone 4 handsets.
The timing tracks the confirmed view that Apple's delayed Verizon entry let Google Android build a strong competitor, making the carrier's low smartphone penetration a launch Apple needs to supply at volume — hence running a new product and a carrier variant through the same new assembler simultaneously.
First-order effects
- Pegatron's assembly lines are now committed across two products at once — the CDMA iPhone 4 ramp of 10 to 12 million units and the ~10-million-unit iPhone 5 start — locking in its position as a second source alongside incumbent assembler Foxconn.
Second-order effects
- Foxconn's de facto exclusivity on iPhone assembly ends, giving Apple negotiating leverage on pricing and allocation across its contract manufacturers as Verizon-launch volumes scale.
Third-order effects
- If the dual-source structure holds beyond these two programs, Apple's hardware roadmap shifts toward splitting flagship products across competing assemblers rather than depending on any single partner's capacity or labor conditions.
The trend: Apple is turning iPhone manufacturing from a single-supplier dependency into a competitive multi-assembler pool, with Pegatron established as the credible second source.