Currently, Quanta Computer supplies all Apple Watch orders. It will continue to assemble the new Apple Watch but Compal Electronics will be given some production orders for the second generation smartwatch.
The upcoming next-generation Apple Watch, which is scheduled to be released in the second half, will continue to be manufactured by the Taiwan-based ODM; however, production of the existing second-generation Apple Watch will be partially given to Compal.
Compal has already moved equipment for production to plants in Chongqing in preparation for Apple's orders.
Compal is the second largest notebook ODM worldwide and has been aggressively expanding into non-notebook businesses over the past few years. Compal shipped five million wearable and IoT devices in 2016, and the volume is expected to increase to over 10 million units in 2017 with the Apple Watch being a major growth driver, the sources noted.
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