Apple prepares new camera-toting iPads: sources

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A salesman displays an Apple iPad during its launch in Brussels July 23, 2010.

Credit: Reuters/Thierry Roge

By Kelvin Soh, Argin Chang and Melanie Lee

HONG KONG/TAIPEI/SHANGHAI | Fri Dec 10, 2010 4:54pm EST

HONG KONG/TAIPEI/SHANGHAI (Reuters) - Apple Inc is working on a smaller iPad tablet with built-in cameras that could ship early next year, according to manufacturers in Asia.

The launch of a new, smaller iPad would expand the iPhone and Macintosh computer maker's portfolio of tablet gadgets that has made waves across the global technology landscape and threatens the laptop market.

Makers of parts of the new iPad are gearing up for a new round of production in the first quarter, these sources said on Friday.

"Having different sizes expands the market and makes it appeal to more people," said Kaufman Bros analyst Shaw Wu.

A smaller iPad would be a departure as Apple Chief Executive Steve Jobs has publicly rejected the idea of such a device in October.

Wu said that while Jobs has a history of throwing Apple watchers off the scent of a good rumor -- most famously when he derided the idea of iPods that play videos -- Apple has also worked on many prototypes that never see the light of day.

Apple's iPad resurrected the market for tablet computers since its introduction in January, with nearly 13 million units expected to ship this year. That total could almost triple next year, providing a much-needed boost for a global technology sector struggling with patchy demand.

Touchscreen chip designer Wintek Corp, battery maker Simplo Technology Co Ltd and AVY Precision, a privately held maker of covers for electronic products, are among suppliers for the next batch of iPads, four people familiar with the situation said.

Two sources said the suppliers were preparing for a new round of production in the first quarter for components previously supplied for the original iPad, while two other sources said they were ramping up for a new iPad.

One source said the revamped model would feature cameras on the front and and back of the device, enabling Apple's Facetime video conferencing service. Another source said it would be slimmer, lighter and have a better resolution display than the first iPad.

A separate supply chain source said Apple was preparing a significantly smaller iPad that is almost half the size of the current model. The current iPad has a 9.7-inch screen.

In October, Jobs dismissed the idea of a 7-inch iPad, saying the screen would be "too small to express the software."

INVESTMENT THEME

"Investing in Apple-related shares is going to be a major theme for most of next year," said Bevan Yeh, a fund manager at Prudential Securities investment Trust, who manages about T$7 billion ($230 million) and owns supplier shares.

"Apple is still the main driver on most technology products, and this will help push the earnings of its suppliers even more in 2011," Yeh said.

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