The move is likely part of an effort by Apple to distribute its weight more evenly. Pegatron became a minor producer of the iPhone in 2011 and began making the iPad mini last year.
People familiar with the matter point to strategic reasons for the shift: risk diversification after Foxconn's manufacturing glitches last year with the iPhone 5 that resulted in scratches on the metal casings, and Apple's decision to expand its product lines amid growing competition from Samsung Electronics Co. and others. Pegatron also has been willing to accept thinner profits as it courts Apple's business, analysts said. The company declined to comment about its pricing.
Pegatron's revenue in the first quarter of 2013 was about $7.4 billion compared to Foxconn's $27.3 billion. It also has thinner operating margins of 0.8% compared to Foxconn's 1.7%.
Apple is expected to unveil new iOS hardware this fall; rather than at WWDC next month. In the meanwhile, check out some concept images here.