Tuesday, March 10, 2009

Apple Plans To Launch Netbook With Touch Screen-Sources

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TAIPEI -(Dow Jones)- Apple Inc. (AAPL) is planning to launch a netbook computer with a touch screen monitor as early as the second half of this year, two people close to the situation told Dow Jones Newswires Tuesday.

The mini laptop computers will likely have monitor screens that are between 9.7-inches and 10-inches, one person, who declined to be named, said.

Another person said other specifications and functions are still under evaluation.

Apple is working with Taiwan's Wintek Corp. (2384.TW), a contract manufacturer of small and medium displays, to make the touch-screen displays and Quanta Computer Inc. (2382.TW), the world's largest notebook maker by revenue, to assemble the new netbooks, the second person said.

Netbooks are primarily designed for Internet browsing and mobile computing. They cost less than conventional laptop computers, and are lighter and smaller.

A slew of PC makers including Dell Inc. (DELL), Hewlett-Packard Co. (HPQ) and Acer Inc. (2353.TW) have in recent months entered this market segment. The companies are hoping to tap new computer users in emerging markets.

Apple's entry may come in what is expected to be a very tough year for computer sales. Desktop-computer shipments in particular are expected to fall by nearly one-third globally in 2009 as consumers increasingly shift to laptop computers, according to projections released by research firm Gartner Inc. earlier in March.

While netbook computers have become a major sales driver for computer companies, Apple Chief Executive Steve Jobs last year dismissed netbooks, even going so far as to suggest Apple's third-generation iPhone - a smartphone device that offer multifunctions - could serve as a netbook. Jobs told analysts in October Apple isn't "tremendously worried" the slump will drive customers to less-expensive PCs and added, "we don't know how to make a $500 computer that's not a piece of junk."

Jill Tan, a spokeswoman for Apple in Asia, declined to comment Tuesday. Wintek spokeswoman Susie Lee and Quanta Computer investor relations officer Carol Hsu declined to comment.

Apple, like many other big personal-computer and consumer-electronics brands, doesn't actually make most of its products. It hires manufacturing specialists - mainly companies from Taiwan that have extensive operations in China - to assemble its gadgets based on Apple's designs.

The arrangement frees Apple and its fellow vendors from running complicated, labor-intensive production lines, while the ability of Taiwanese companies to slash manufacturing costs helps cut product prices over time.

Quanta assembles Apple's MacBook and iMac computers.

Shares of Wintek and Quanta rose on the news. Wintek shares rose 6.9% to NT$ 11.70, while Quanta shares gained 4.4% to NT$37.60. The broader market closed up 0.9%.

But Yuanta Securities analyst Vincent Chen said the share price gains may be limited as orders from Apple may not be large.

"Apple is unlikely to make very cheap products. The netbook would most likely be very niche, meaning volume is going to be small."

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