RUMOR: Pegatron, Hon Hai win Apple orders for CDMA iPhone production

“The Taiwan-based Hon Hai Precision Industry Co., Ltd., now the world`s largest EMS (electronic manufacturing service) provider, is reportedly going to ship the newest CDMA edition of iPhone 4 to Apple Inc. in 2011, according to industry sources,” Steve Chuang reports for China Economic News Service (CENS).

The sources noted that Apple’s order for the CDMA iPhone 4 has been shared evenly between Hon Hai and its Taiwanese peer Pegatron Corp., with Hon Hai`s shipment of the device projected at 15 million units for 2011,” Chuang reports. “Apple will launch the phone in early 2011 in cooperation with a couple of telecom companies as Verizon and China Telecom, in a bid to further boost its smartphone market share through exploring the CDMA segment.”

Chuang reports, “Institutional investors have projected total sales of iPhone smartphones at 50 million units for this year and 75 million units for 2011. As the biggest contract supplier for Apple, Hon Hai will surely benefit from the hot-sellers. Noteworthily, Hon Hai Group has poured US$299 million into construction of a factory in Chengdu, Sichuan Province, southwestern China, to engage in production of Apple’s iPad tablets.”

Read more in the full article here.

[Thanks to MacDailyNews Reader “Dow C.” for the heads up.]

38 Comments

  1. @Gregg Thurman

    Where in that contract does it say Apple cannot make a phone that won’t operate on AT&T’s networks? I believe AT&T has an exclusive arrangement for the iPhone as it pertains to any US GSM network. Everything else outside that arrangement is fair game.

    Until I hear otherwise, I’ll believe Apple has been free from day-one to build and sell anything but a GSM phone here in America and that they’ve been working on a CDMA version all along.

    Apple realized the sales potential for iPhone eclipsed the spectrum of a single standard like GSM, the moment Verizon turned them down. Admittedly, they needed a boost from AT&T to launch the iPhone, but I never doubted for a minute that Apple would confine it to a single carrier.

    In this day and age, do you really believe a contract is so bullet-proof, that a company like Apple couldn’t find wiggle room around it?

    You, my friend, put too much faith in the legal system and not enough in Apple.

  2. Thank you Pedrag. Its obvious from follow-up comments “Nobody knows the terms of the Contract but High Exec’s @ Apple & ATT” and “Until I hear otherwise, I’ll believe Apple has been free from day-one to build and sell anything but a GSM phone here in America”, that many ignore facts in favor of their own wishes/biases.

    The fact is that Apple submitted THE contract (in its defense) for examination by the Courts. Once submitted that contract became subject to public review (as was Apple’s testimony).

    http://www.engadget.com/2010/05/10/confirmed-apple-and-atandt-signed-five-year-iphone-exclusivity-de/

    Anything that goes beyond documented terms of the Apple/ATT deal is pure speculation, with no supporting evidence to its legitimacy.

  3. Thank you Pedrag. Its obvious from follow-up comments “Nobody knows the terms of the Contract but High Exec’s @ Apple & ATT” and “Until I hear otherwise, I’ll believe Apple has been free from day-one to build and sell anything but a GSM phone here in America”, that many ignore facts in favor of their own wishes/biases.

    The fact is that Apple submitted THE contract (in its defense) for examination by the Courts. Once submitted that contract became subject to public review (as was Apple’s testimony).

    http://www.engadget.com/2010/05/10/confirmed-apple-and-atandt-signed-five-year-iphone-exclusivity-de/

    Anything that goes beyond documented terms of the Apple/ATT deal is pure speculation, with no supporting evidence to its legitimacy.

  4. Re: 5-Year Contract
    At the debut iPhone keynote Jobs said he was VERY grateful to Att for trusting him, that he had given them an exclusive 5-Year contract therefore, and that he would NOT violate it, no matter what. Then he went in to say something disparaging about other tech companies that make such promises and don’t honor them.

    No need for court documents. It was all said very earnestly and quite openly.

    That said, it is certainly possible to buy out years of a contract. It may be that Android has become so strong that Apple decided to buy a year from Att to allow them to better compete.

  5. Re: 5-Year Contract
    At the debut iPhone keynote Jobs said he was VERY grateful to Att for trusting him, that he had given them an exclusive 5-Year contract therefore, and that he would NOT violate it, no matter what. Then he went in to say something disparaging about other tech companies that make such promises and don’t honor them.

    No need for court documents. It was all said very earnestly and quite openly.

    That said, it is certainly possible to buy out years of a contract. It may be that Android has become so strong that Apple decided to buy a year from Att to allow them to better compete.

  6. “That said, it is certainly possible to buy out years of a contract. It may be that Android has become so strong that Apple decided to buy a year from Att to allow them to better compete.”

    Anything is possible, I’m just not banking on “anything” until Apple confirms it.

    I wouldn’t be overly concerned about Android. All you have to do, to see the real effect of Android, is look at new subscribers on Verizon vs ATT. The difference is overwhelming and in favor of ATT. They are now at parity in total subscribers. Four years ago ATT was a distant 2nd. So much for complaints about ATT’s network as well. It isn’t ATT’s fault that the area where they have the most problems (SFRAN) is also the most restrictive in new cell tower construction. Where it takes other venues 2 – 3 months to get permits, it takes up to 5 years to get the same permit in SFRAN.

  7. “That said, it is certainly possible to buy out years of a contract. It may be that Android has become so strong that Apple decided to buy a year from Att to allow them to better compete.”

    Anything is possible, I’m just not banking on “anything” until Apple confirms it.

    I wouldn’t be overly concerned about Android. All you have to do, to see the real effect of Android, is look at new subscribers on Verizon vs ATT. The difference is overwhelming and in favor of ATT. They are now at parity in total subscribers. Four years ago ATT was a distant 2nd. So much for complaints about ATT’s network as well. It isn’t ATT’s fault that the area where they have the most problems (SFRAN) is also the most restrictive in new cell tower construction. Where it takes other venues 2 – 3 months to get permits, it takes up to 5 years to get the same permit in SFRAN.

  8. Apple dealing with a single carrier was only business focused/centric. That’s what they were looking for from the beginning and that’s what they intended always.

    Apple dealt an exclusive single carrier because that way you can get a much better cut from the deal, by allowing exclusivity. If you all remember right, they were asking for a revenue share (I don’t know how much) China Mobile did not want or allow that; China Unicom may have accepted Apple’s terms of revenue share or similar thing in lieu of. In countries where they couldn’t do that, it was because of the Federal law restriction(s) (remember France?, Germany?).

    Additionally, dealing with a single carrier things happen faster, and is operationally and logistically simpler.

    Manufacturing wise it is much simpler and easier to go with only one kind of cellular technology. And that’s what they did.

    The “most every one knows/says 5 year exclusive contract with AT&T” to carry the iPhone is for the iPhone cellphone irrespective of cellular technology. AT&T would not accept (and would have not accepted) revenue share from phone service (apart from the subsidy) if they knew Apple could come out with an iPhone in another carrier. So the exclusivity contract must contain statements to block/avoid Apple dealing with another carrier to carry the iPhone.

    I believe the so called 5 year exclusivity contract can very well be a 3 or 4 year contract.

    In case of a 3yr, the end would have been end of June 2010. This did not happened. And end of December 2010 would be a 3.5yr.

    In case of a 4yr, the end would be end of June 2011.

    And if it is a 5yr, the end would be end of June 2012.

    Bottom line, we will know sooner than later. And AT&T got ahead a very good few years.

  9. Apple dealing with a single carrier was only business focused/centric. That’s what they were looking for from the beginning and that’s what they intended always.

    Apple dealt an exclusive single carrier because that way you can get a much better cut from the deal, by allowing exclusivity. If you all remember right, they were asking for a revenue share (I don’t know how much) China Mobile did not want or allow that; China Unicom may have accepted Apple’s terms of revenue share or similar thing in lieu of. In countries where they couldn’t do that, it was because of the Federal law restriction(s) (remember France?, Germany?).

    Additionally, dealing with a single carrier things happen faster, and is operationally and logistically simpler.

    Manufacturing wise it is much simpler and easier to go with only one kind of cellular technology. And that’s what they did.

    The “most every one knows/says 5 year exclusive contract with AT&T” to carry the iPhone is for the iPhone cellphone irrespective of cellular technology. AT&T would not accept (and would have not accepted) revenue share from phone service (apart from the subsidy) if they knew Apple could come out with an iPhone in another carrier. So the exclusivity contract must contain statements to block/avoid Apple dealing with another carrier to carry the iPhone.

    I believe the so called 5 year exclusivity contract can very well be a 3 or 4 year contract.

    In case of a 3yr, the end would have been end of June 2010. This did not happened. And end of December 2010 would be a 3.5yr.

    In case of a 4yr, the end would be end of June 2011.

    And if it is a 5yr, the end would be end of June 2012.

    Bottom line, we will know sooner than later. And AT&T got ahead a very good few years.

  10. “At the debut iPhone keynote Jobs said he was VERY grateful to Att for trusting him, that he had given them an exclusive 5-Year contract therefore, and that he would NOT violate it, no matter what.”

    He did? Jeez, I guess I missed that part ” width=”19″ height=”19″ alt=”wink” style=”border:0;” />

  11. “At the debut iPhone keynote Jobs said he was VERY grateful to Att for trusting him, that he had given them an exclusive 5-Year contract therefore, and that he would NOT violate it, no matter what.”

    He did? Jeez, I guess I missed that part ” width=”19″ height=”19″ alt=”wink” style=”border:0;” />

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