Apple To Shift Asian Manufacturing Outsourcing

by , 12:30 PM EDT, May 28th, 2002

AsiaBizTech is reporting that Apple is planning on shifting some of its manufacturing capacity. The publication, often a source of information on Apple's Asian manufacturing business, says that Apple will be shifting production of LCD displays from Quanta Computer to Hon Hai Precision Industry. The reason for the production shift stems from patent-related issues between the two Asian manufacturing giants. From the article:

Apple Computer Inc. recently has been reported to be shifting contracts for making its iMac computers with liquid-crystal display (LCD) monitors to Hon Hai Precision Industry Co., Ltd. from Quanta Computer Inc. as a result of Quanta's failure to acquire some patented key components from Hon Hai.

According to the local media, Hon Hai has been contracted to supply components for Apple's iMac computer equipped with cathode ray tube (CRT) monitor, and developed some patented parts for iMacs. Hon Hai has not delivered the components to Quanta, which was contracted to make iMac computers in 2001, for unknown reasons.

Hon Hai's failure to supply Quanta with the crucial components has prevented Quanta from maintaining an even rate of production. Its difficulties have reportedly prompted Apple to decide to shift the orders to Hon Hai.

Thanks to Observer Antay for the heads up on this development. You can read more information in the full AsiaBizTech article, including other background information on Apple's manufacturing deals.

The Mac Observer Spin:

Apple's outsourcing of its manufacturing capacity has allowed the company to stay nimble, and to concentrate on what it does best: design great computers and even better software. This shift will most likely never be noticed by consumers, but may be of interest to Wall Street. It's interesting to see that Hon Hai was able to win the deal by simply holding out on patented parts to the current contract holder. In any event, we hope this deal allows Apple to keep production of the iMac smoother and more predictable.

AsiaBizTech Article