Quanta Wins Apple iPhone Contract?

Shares of Taiwan's Quanta Computer Inc. soared early Tuesday after the island's two largest financial daily newspapers said the company had won orders for Apple Inc. iPhones.

Quanta, the world's largest contract laptop PC manufacturer, will start making iPhones in September on an initial order for 5 million handsets, the Chinese-language Commercial Times and Economic Daily News both reported on Tuesday, without citing sources.

In a statement, Quanta said that while it is taking measures to win new orders and increase business, it declined to comment on the reports because agreements with customers are confidential.

A source at Quanta said the company has not won orders for the iPhone yet, but that the company is vigorously competing for such orders.

Investors in Taiwan piled into Quanta stock early in the day, sending shares up to NT$51.8 (US$1.56) each at the open. But the price drifted lower throughout the day as investment banks and analysts speculated on whether or not the newspaper reports were accurate. The ticker ended the day at NT$50.8, up just NT$0.2.

Speculation around the issue and the fact that it would move stocks so much show how much excitement there is about the upcoming Apple product. Despite some complaints such as the high price for the handset and having only one option for mobile phone service, Cingular Wireless/AT&T Wireless, many expect it to be a hit. The iPhone debuts in June.

Hon Hai Precision Industry Co. Ltd., the world's largest contract electronics manufacturer, is believed to be the main manufacturer for the iPhone. The company does not comment on customer orders.

Knowledge of the company's work making iPod digital music players for Apple came to light last June, after U.K. newspaper, the Mail On Sunday, reported long hours and little pay for production line workers at Hon Hai iPod factories in China. Apple responded by sending a team to investigate the claims. It found the factories mostly complied with Apple rules for its manufacturing partners. But it asked Hon Hai to remedy a few issues, including living conditions at some worker dormitories and improved transportation for workers.