What you need to know

  • A Digitimes report suggests Quanta Computers may stop taking Apple Watch assembly orders over profit concerns.
  • Quanta assembles the majority of Apple Watches, alongside Compal Electronics.
  • It could even be forced to sell its dedicated Changshu plant in China.

A report from Digitimes via Cult of Mac today suggests that Apple's largest Watch assembly partner, Quanta Computers, may stop taking assembly orders from Cupertino next year over profit concerns.

According to the Cult of Mac:

"Quanta Computer is likely to stop taking assembly orders for the ‌Apple Watch‌ next year due to profit concerns," reports Digitimes, citing industry sources.

The Taiwanese firm may even "sell its Changshu plant in China" dedicated to Watch assembly.

As the report notes, Quanta has worked in partnership with Apple to assemble the Apple Watch since its launch in 2015. Apple recently brought in Compal Electronics to share some of that load, however Quanta still assembles the majority of Apple Watches. There seems to be no indication at this stage what these profits concerns pertain to or how serious they might be. It seems strange to imagine that Apple Watch's prime assembly partner is struggling given the success of Apple Watch over the last four years.

As International Business Times notes, Strategy Analytics data suggests that as of Q2 2019, Apple Watch held a 46% share of the global smartwatch market, shipping 5.7 million units in the same quarter, a 50% YOY increase.

If Quanta is indeed struggling for cash, and does decide to walk away from the Apple Watch, Apple will need to fill a rather large deficit in its Apple Watch production. As of just now however, there is no indication that Quanta's withdrawal is a certainty, or that it could impact supply of the Apple Watch.