Apple allegedly shifting iMac production from Quanta to Pegatron

iMac 8G (two up, left angled, right angled)

If a new report by the somewhat reliable DigiTimes is to be taken at face value, then Apple may shift production of its all-in-one iMac desktop from the current manufacturer Quanta to Pegatron. Now, Pegatron already builds older iPhones, has reportedly been commissioned to build Apple’s rumored plastic iPhone and used to make iMacs.

Nowadays most iMac orders are being fulfilled by Quanta, which also assembles the majority of MacBook Air and MacBook Pro notebooks…

DigiTimes writes that Apple may shift some of its iMac orders from Quanta Computer to Pegatron Technology, potentially a devastating blow as Mac contracts account for half of Quanta’s revenues.

Following last Fall introduction, Apple initially was forced to push back availability of the current ultra-thin iMac lineup. The company blamed the delay on a complicated manufacturing process called friction-stir welding and the challenges of laminating a display measuring 27 inches diagonally.

Of course, neither Quanta nor Pegatron would comment on the rumor, with unnamed suppliers claiming to have already sent iMac components to Pegatron for evaluation.

Sources from the upstream supply chain pointed out that to become a qualified supplier of Apple requires a series of evaluations and pilot production.

The factories used for manufacturing Apple products need to be isolated from other factories, and mass production usually takes more than one year to start.

Rival Pegatron used to assemble MacBook Airs so it may be able to ramp up iMac production quickly as it’s fairly experienced in building Apple’s popular all-in-one desktop.

And should Apple consider splitting Mac notebook orders, “Pegatron should be one of the major candidates,” DigiTimes acknowledges.

The rumor is especially interesting in light of an alleged rift between Apple and its long-time primary manufacturer Foxconn over slowing sales of Apple’s gadgets and lack of product updates.

That’s hardly surprising: any blip in Apple sales inevitably takes a toll on Foxconn’s bottom line since the manufacturer’s fortunes are so closely tied to Apple.

Reuters, for example, reported back in May that Foxconn has been under constant threat of losing orders to rival Pegatron for some time. Apple is believed to be distancing itself from Foxconn out of desire to balance its supply chain.

iMac (three up, perspective)

More importantly, Apple is allegedly angry that Foxconn’s quality issues with the iPhone 5 production had initially resulted in scratches and dings for early adopters, earning the iPhone maker tons of bad press that in turn has tarnished its brand.

Be that as it may, Foxconn apparently will exclusively assemble the iPad mini 2 and is said to remain the primary manufacturer of the upcoming iPhone 5S update, with Pegatron likely accounting for a much smaller portion of the iPhone 5S units.

iMac (top view, wireless keyboard and mouse)

Another market rumor suggests Pegatron may have cut a three-year deal with Apple to build full-size iPads. Competition to enter Apple’s supply chain obviously remains fierce.

In that regard, it’s interesting that China Labor Watch recently slammed Pegatron for reportedly serious labor right violations at its manufacturing facilities in China.