Pegatron to begin shipments of iPhone 5 in September
Pegatron Technology has landed orders for 10 million units of iPhone 5 to become the second ODM of the smartphone. Shipments will start in September, according to industry sources. — As iPhone gross margins are relatively small …
Context & Ripple Effects
Pegatron's path to second-source status on the iPhone has been building all year: back in January it was reported to be tooling up for an initial 10 million-unit run of 10m initial iPhone 5s while keeping its iPhone 4 lines busy, and in early July sources pegged its Apple orders at 15 million iPhone 5s. Today's figure of 10 million units shipping from September is lower than that July number and comes from unnamed industry sources, so the volume should be read as unconfirmed.
The timing claim is not new either — Silicon Alley Insider reported in April, from talks with a key supplier, that iPhone 5 production would start in September, and upstream suppliers have been preparing materials since early July. What is genuinely notable is that syndicated pickups at AppleInsider, BGR and the Guardian turned this into a public September-versus-October launch-date argument, with BGR pointing to an October Canadian launch while the Guardian defended the September case.
First-order effects
- Pegatron moves from rumored candidate to active second ODM on the iPhone line, splitting assembly volume with the incumbent assembler during the peak fall build cycle — with the caveat that both the 10-million-unit figure and the September ship date rest on unnamed industry sources.
- The confirmed note that iPhone gross margins are relatively small frames what Pegatron gets: high-volume but low-margin work that mainly buys it scale and a deeper Apple relationship.
Second-order effects
- Component suppliers already ramping materials for the iPhone 5 and iPad 3 since July gain a second large-volume customer to allocate parts toward, tightening upstream supply in the quarter ahead of launch.
- A two-assembler structure gives Apple pricing leverage over both suppliers on margin-thin assembly contracts, pressuring Pegatron to absorb costs or differentiate on yield.
Third-order effects
- If the pattern holds, Apple's manufacturing base keeps diversifying across Taiwanese ODMs rather than concentrating in one assembler — shifting bargaining power in consumer-electronics assembly toward the brand and away from the contract manufacturers competing for its orders.
The trend: Apple is broadening its iPhone assembly base by qualifying second-source ODMs like Pegatron, trading supplier concentration for cost leverage as device volumes scale.