Rumor: iPhone manufacturing contracts now up to 17 million

Forbes has a report this morning that cites a rumor in a local Taiwanese newspaper that Taiwan's Quanta Computer has received an order to build 5 million iPhones with deliveries starting in September. If we add that to Hon Hai's rumored 12 million iPhone contract, that brings us up to 17 million contracted through 2008, or nearly double Steve Jobs' desire to grab 1% of the global cell phone market.

Blackfriars' speculation: this makes a ton of sense to us. It's not that Hon Hai isn't doing a great job manufacturing iPhones (at least so far as we know), but rather that Apple is planning for strong holiday demand and ramping up manufacturing capacity to serve it. No matter how good your manufacturing partner is, there are always unexpected glitches in production, so having multiple manufacturers reduces supply risk.

Full disclosure: the author owns Apple shares at the time of writing.

Technorati Tags: Apple, Hon Hai, iPhone, Manufacturing, Mobile phones, Quanta