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Apple orders likely to account for 50% of Pegatron '13 revenue

TAIPEI -- Taiwan's Pegatron Corp., an assembler of Apple Inc.'s iPhone and iPad, is likely to see orders from Apple account for a higher share in its revenue this year, owing to the expected launch of new products by the American brand, a Japanese brokerage said Monday.

Nomura Holdings Inc. raised its Pegatron stock rating from “neutral” to “buy” with a target price of NT$53 (US$1.79), citing an expected increase in the company's margins and strong growth from its Apple business.

“We expect Pegatron to begin manufacturing Apple's new iPhone model in June/July and Pegatron should continue to be a major source for the next generation of the iPad mini in 2013,” Nomura analyst Eve Jung wrote in a research report.

She estimated that Pegatron will supply 60 percent and 24 percent of Apple's iPad minis and iPhones in 2013, respectively. As a result, Apple could account for about half of Pegatron's revenue this year, up from 35 percent in 2012, Jung said.

Pegatron shares had gained 3.29 percent to trade at NT$40.85, as of 11:23 a.m. Monday.

The Commercial Times reported Monday that Pegatron will begin the pilot production for a low-cost version of iPhone in May, before Apple's new products hit the market in the third quarter.

Pegatron is forecast to ship about 40 million units of the new iPhone model, whose price could be reduced to as low as US$350 by adopting a plastic casing, the local newspaper said.

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