A report out of Taipei , Taiwan, from DigitTimes.com says that Apple is beginning production of 17" and 19" LCD-based iMacs. The report cites leak-prone Quanta Computer, one of Appleis outsourced manufacturing partners. From that article:

Industry sources said Quanta Computer will start producing the latest 17 and 19-inch iMacs in the third quarter, suggesting a strengthening partnership between the PC contract maker and Apple Computer.

The popular iMac has become a main revenue driver for Quanta as uncertainty still clouds the desktop PC industry and signs of a recovery appear weak. The company shipped 235,000 units to Apple in the first quarter, and despite TFT LCD supply crunches in April that halted production for a week, analysts predict second-quarter shipments could grow to 350,000 units.

Ironically, this article is contradicted in part by other leaked news from Asia concerning Quanta Computer. AsiaBizTech reported last week that Apple was shifting production of the current iMac to Hon Hai Precision Industries, a company also mentioned in the DigiTimes article as a component supplier to Quanta. DigiTimes says that Quanta is the only iMac manufacturer, while the AsiaBizTech article, Hon Hai Precision Industries had been given the contract for production of iMacs due to patent related issues between Quanta and Hon Hai.

Appleis policy is not to comment on unannounced products.

To add a further twist to this rumor, Morgan Stanley has said that Apple will miss estimated iMac unit shipments this quarter. The firm said that Apple was to have shipped 300,000 iMacs this quarter, but would instead only ship some 235,000 units. Shortly after this broke, Salomon Smith Barney issued a statement in support of Apple saying that the company was never supposed to have shipped more than 265,000 iMacs this quarter, and that they would ship between 225,000 and 250,000 (read our full report for more information). The DigiTimes article says that Quanta will ship as many as 350,000 units to Apple during this same quarter.

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