Under Steve Jobs, Apple formed a famous partnership with Foxconn, which saw the latter producing almost all of Apple's iPhones and iPads. However, under current CEO Tim Cook, Apple is looking to diversify its supply chain and is looking to Pegatron to offer some kind of balance.
Pegatron is widely expected to be the primary assembler of rumored low-cost iPhone that will debut later this year. Pegatron started producing iPhones in 2011 and began making iPad Mini tablet computers last year.
According to sources, the reason behind such a move is to diversify risk, especially after Foxconn's manufacturing glitches last year with the iPhone 5 that resulted in scratches on the metal casings. Sources also say Apple is looking to expand its product lines as it faces increasing competition from Samsung and others. Finally, Pegatron is also said to be willing to accept less profits as it is keen to do business with Apple.
Source: Wall Street Journal