Investec gets Apple music player order

Apple Computer Inc, maker of the iMac personal computer, placed an order for its iPod digital music player with Inventec Co (英業達), the Taiwanese supplier said.

Inventec will make 600,000 iPod MP3 players annually, with shipments beginning this year, a Chinese language newspaper

reported.

"I believe it's accurate," Inventec spokesman Eric Chen said.

The order was given to unit Inventec Appliances Corp, which develops and manufactures handheld and Internet devices, he said, without specifying the value of the order or when it was placed.

Brand-name computer makers are increasing orders to Taiwan manufacturers to cut costs as slowing growth in the biggest economies damps consumption. Taiwan's PC makers, in turn, are extending their customer base to reduce the risk arising out of pacts such as Hewlett-Packard Co's acquisition of Compaq Computer Corp.

"A new order is good news," said Tom Lu, who manages NT$1.1 billion (US$32 million) in stocks, including Inventec, at President Investment Trust Corp (統一投信). "It's good to see Inventec finding new customers to diversify its customer base and lower its risk."

Shares in Inventec, which makes notebook computers for Compaq Computer Corp, rose as much as NT$1.1, or 6.7 percent, in earlier trading to NT$17.60.

Inventec will also start selling notebook computers to Toshiba Corp from next year, the report said.

With Compaq being its only customer, Inventec's performance has been closely tied with that of the second-largest personal computer maker.

Compaq reported a US$499 million loss in the third quarter, blaming slowing demand and a price war. Inventec sales fell a third in the first nine months to NT$48.4 billion.

The order to Inventec isn't Apple's first to a Taiwan computer maker. Quanta Computer Inc (廣達電腦) and Alpha-Top Corp (致勝科技) make notebook computers for Apple. Hon Hai Precision Industry Co (鴻海精密) assembles Apple's iMac, analysts said.

The iPod order, however, was the first time Apple hired a Taiwan company to make the units, the report said.

MP3 players enable users to download and compress audio from their computer or the Internet. The iPod, which Apple sells for about US$400, can store as many as 1,000 songs.