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Low-cost iPhone rumor reignited by Apple supplier's hiring spree

Apple supplier Pegatron will increase its workforce by 40 percent this quarter, triggering speculation that it will produce a cheaper iPhone, according to Reuters.


A boost in hiring from one of Apple's key suppliers could be yet another sign of a low-cost iPhone.

Pegatron, which makes the iPhone and iPad, said that it will build up its workforce in China by up to 40 percent during the second half of the year, Reuters reported Thursday. Such a huge increase suggests that the company could be equipping its factories to produce the much-rumored low-cost iPhone, which could launch sometime in the third quarter.

Certain suppliers have already told Reuters that Apple is prepping a less-expensive model of its smartphone geared toward developing markets. Several analysts and news sources also have piped in over the past few months with the same suggestion.

Charles Lin, Pegatron's chief financial officer, declined to comment to Reuters as to whether the company would produce a low-cost iPhone this year. But Lin did say that 60 percent of Pegatron's 2013 revenue is expected to come during the second half of 2013.

Analysts Ming-Chi Kuo with KGI Securities and Gene Munster with Piper Jaffray both believe a low-cost iPhone is in the works for this year.

Kuo initially pegged a June announcement followed by a July launch. But that's unlikely at this point, especially since Apple CEO Tim Cook recently said the company would unveil no new devices until the fall. Munster is eyeing a September release of a $300 nonsubsidized iPhone, which could bring in unit sales of 75 million next year.

However, Jefferies analyst Peter Misek thinks the low-cost iPhone may face a delay. After a visit with Apple's Asian suppliers, Misek's take is that the cheaper iPhone may not debut until the fourth quarter of the year.