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China Labor Watch released a new report today on the working conditions of laborers at Apple supplier Pegatron. Its conclusion? They suck: too many hours, poor conditions, and underage workers.

But the report also leaks the first undeniably credible real hard-core traceable evidence of Apple’s cheaper iPhone.

And not just once. Multiple times throughout the report, China Labor Watch documents that Pegatron has been contracted to build Apple’s coming — and much needed — new, cheaper iPhone. It has a plastic back, as we’ve previously heard, and workers talk about it in their reports as common knowledge.


Furthermore, the cheap iPhone is coming soon.

I asked China Labor Watch when the report was compiled. A director, who did not give his name and required translation help from the organization’s receptionist, answered that it was data from as far back as five months ago.

“It was compiled from March to July, but written in July,” he told me.

That means the cheap iPhone was being built in pre-production status as early as March, though more likely a little later, and that it is almost certainly in near-full production now.

One of the leaked images of the new iPhone mini, reportedly.

Above: One of the leaked images of the new iPhone Mini, reportedly.

Image Credit: Tactus

Here are just a few mentions of the device in the report:

Page 1, executive summary:

Apple is preparing to release a cheap iPhone. Just how does a prosperous company like Apple produce a discounted version of its phones?

. . .

At this moment, in Shanghai, China, workers in Apple’s supplier factory Pegatron are monotonously working long overtime hours to turn out a scaled-back, less expensive version of the iPhone.

. . .

So what is the competitive advantage that Pegatron has utilized to win Apple’s order of the cheap iPhone? Extensive labor violations and suppressed wages that cheat workers of a living wage, a healthy working environment, and a voice. As Apple launches its cheaper iPhones, it continues to profit while cheapening the value of the workers in its supply chain.

Page 11, Pegatron’s company profile:

Pegatron (Shanghai) Ltd Co. is part of the Pegatron Group, which was a subsidiary of Pegatron Group until 2010. Pegatron primarily assembles cell phones and tablet PCs for Apple. Its assembled products include iPhone 4, iPhone 4s, iPhone 5, and low-priced plastic iPhones.

Page 28, worker’s story:

Today’s work is to paste protective film on the iPhone’s plastic back cover to prevent it from being scratched on assembly lines. This iPhone model with a plastic cover will soon be released on the market by Apple.

. . .

The new cell phone has not yet been put into mass production, so quantity is not as important. This makes our job more slow paced than in departments that have begun mass production schedules.

As 9to5Mac said this morning, we’ve seen a wealth of evidence that Apple is planning to release a cheaper iPhone. And it’s a clear and present business need, given the company’s near-disastrous international performance in the past quarter.

But it’s always possible that you’re seeing cleverly-created fakes, Photoshop jobs, even professionally-produced imaginary products created by competitors to cloud Apple’s future product line and reduce current sales. China Labor Watch is a respected 13-year-old organization that is visible, takes ownership of what it does, and collected credible first-hand reports.

This is the first traceable evidence from a nameable third-party organization that Apple has been building its cheaper iPhone for months — and that it must be coming to market soon.

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