Quanta might become iPhone supplier: report

Quanta Computer Inc (廣達電腦), the world's biggest contract maker of notebook computers, could be roped in as the second supplier for Apple Inc's iPhone, a report said yesterday.

IPhone combines Apple's iPod music and video player with a mobile phone and wireless Internet access for e-mail.

"Our industry research suggests that Apple Inc may consider using Quanta as the second supplier for iPhone," Henry King (金文衡), an analyst for Goldman Sachs Group Inc, said in a report yesterday.

If sealed, the deal may somewhat offset the market's concerns about Quanta's low-margin handset and TV businesses, as well as the delay of its One Laptop per Child budget-computer business, he said.

"However, a new business opportunity on the handset side may not be sufficient to offset the forecast slowdown in its notebook growth in the second half, especially in the last quarter," he said.

Notebook business should still account for more than 75 percent of Quanta's total revenues this year, said Goldman Sachs, which gives a "neutral" rating for Quanta with a 12-month target price of NT$55 (US$1.65).

Quanta yesterday said it could not comment on contract business because of confidentiality agreements with its clients.

Shares closed up 0.3 percent to NT$48.50 on the Taiwan Stock Exchange yesterday.

Quanta has said several times since last year that it intended to boost non-core businesses -- including mobile phones, liquid-crystal-display TVs, automotive electronics, servers and storage products -- to account for 30 percent of total revenues next year.

Hon Hai Precision Industry Co (鴻海精密), the nation's largest maker of electronics parts, is currently the sole assembler of the iPhone, which is set to debut in the US late next month, while other markets will see the iPhone later this year and next year.

Other Taiwanese component suppliers to the iPhone include connector maker Entery Industrial Co (恩得利工業), frequency control maker TXC Corp (台灣晶技), stainless casing firm Catcher Technology Co (可成企業), and Cheng Uei Precision Industry Co (正崴精密), a provider of connectors and Bluetooth modules.

Apple intends to launch two versions of the iPhone -- a 4-gigabyte model for US$499 and an 8-gigabyte one for US$599, hoping to sell 10 million units next year, representing about 1 percent of the world's handset market share.

Jason Lin (林群傑), director of Quantas' strategic investment division, told the Taipei Times on March 5 that the firm had shifted strategy in making cellphone products to focus on personal digital assistant phones and smartphones with higher margins.

Quanta shipped only 2 million handsets last year -- accounting for about 2 percent of its total revenues -- and shipments will remain flat this year, Lin said.

On Wednesday, the company said its sales surged 22 percent last month to NT$44 billion (US$1.32 billion) from NT$36 billion a year earlier, while sales for the first four months jumped 33 percent to NT$187 billion.