Report: Microsoft to outsource Windows Surface tablets to iPad supplier

In an interesting twist, Taiwanese company Pegatron -- formerly owned by Asus and now a major iPad supplier -- reportedly will build Microsoft's Surface tablets

Taipei-based online newspaper DigiTimes -- which has had a remarkable string of accurate predictions about Microsoft's tablet plans -- reported yesterday that Microsoft has outsourced production of both the Windows RT and Windows 8 Pro Surface tablets to Taiwanese firm Pegatron Technology. If true, that's a remarkable development for several reasons.

If the name "Pegatron" sounds familiar, it's because it was in the international news in December. "Apple Supplier Pegatron Reports Explosion at Subsidiary in China" ran the headlines, after an explosion near an aluminum dust particle collecting machine injured more than 60 employees. The Shanghai factory was operated by RiTeng Computer Accessory, which is wholly owned by Pegatron. The plant made backs for the iPad 2, and Apple drew a storm of criticism for its actions. Pegatron and Hon Hai's Foxconn are widely believed to be Apple's two largest manufacturers.

Pegatron's history is a bit obscure, even by the tight-lipped standards of Asian electronics manufacturers. It used to be a wholly owned subsidiary of Asus, created in 2007 in an attempt to find customers for Asus's design and manufacturing capabilities. (The names Asus and Pegatron both derive from Pegasus.) In December 2009, Asus spun off Pegatron as an independent company, with Asus retaining 25 percent of the stock. Three months ago, DigiTimes quoted Chinese-language site Commercial Times, saying that Asus plans to sell off its remaining Pegatron shares starting in May.

There's no question that Pegatron is a major Apple supplier -- indeed, it has been for several years. Its ties with Asus are manifest. There were even persistent rumors in February, originating with Commercial Times, that Apple had demanded Pegatron cease production of the Asus Zenbook, ostensibly due to some MacBook Air technology being used.

Pegatron's first-quarter 2012 financial report (PDF) shows that operating revenues at the company hit $3.9 billion for the quarter, nearly double last year, and 30 percent of Pegatron's gross sales for the quarter went to Asus.

With Microsoft's move into the computer manufacturing business likely to alienate its erstwhile "partners" -- HP, Dell, Lenovo, and Acer, among many others -- one has to wonder if its choice of Pegatron as manufacturer may ultimately be beneficial to Asus.

I also wonder how this news is going down in Apple circles.

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Copyright © 2012 IDG Communications, Inc.