Apple supplier

Apple supplier Pegatron has announced plans to hire an additional 40,000 workers later this year as speculation about a budget iPhone continues to grow.

Reuters understands that the workforce increase of 40% is to support the manufacturing of components for the wallet-friendly iOS handset.

iPod Touch (fifth generation)

The report claims that the budget iPhone will enter production this month, before mass production is initiated in June.

“Making the cheaper iPhone will further help Pegatron’s operating margin because its plastic casing is easier to make than iPhone 5’s metal casing; this should ensure a good yield rate,” said Fubon Securities analyst Arthur Liao.

Apple is thought to be adding the budget iPhone to its line to gain ground in developing markets, where customers have less disposable income.

The company is also expected to unveil a new flagship iPhone, iPad and an iPad mini with a Retina display this year.

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