Rumor: Apple Selects iWatch, 12-Inch iPad Supplier

Apple AAPL has reportedly hired Quanta Computer QUCCF to build two new products. According to DigiTimes, Quanta will build the iWatch and the 12-inch iPad for Apple. Neither product has been confirmed, but Apple has been rumored to be developing both products for several months. Those rumors appeared to have inspired Samsung SSNLF, Apple's chief competitor, to take preemptive action. The South Korean tech giant has already released its first smart watch, Galaxy Gear. The company is also rumored to be developing a 12-inch tablet. The DigiTimes report claims that Samsung is still developing the tablet despite the loss of a massive partner. Samsung had planned to build the device with Google GOOG, but Google has decided to focus on smaller tablets instead. This left Samsung without a partner, but not without the desire to compete with Apple at every turn. While most of the iPhone 5S and iPhone 5C rumors turned out to be true, there is no guarantee that Apple is actually building a smart watch or a larger-size tablet. In fact, the iWatch could turn out to be a clever codename for the company's long-awaited television set. Related: MacBook Sales Could Decline At Least 13% In 2013 Earlier this year, millions of consumers chose to purchase the iPad Mini instead of the iPad 4. Why would Apple invest in developing, manufacturing, shipping and promoting a 12-inch tablet if consumers prefer the 7.9-inch format? DigiTimes' sources are worried that 12-inch tablets will hurt the laptop market, but that is a non-issue. Existing tablets are already impacting notebook sales. This is what happens as technology evolves: eventually, the oldest dinosaurs get replaced. There was a time when the computer market was led by desktop PCs. After notebooks reduced the gap in power (and became lighter and easier to carry), desktop PC sales fell and notebook sales increased. Now tablets are destined to take over. There will still be a market for notebooks, but instead of buying a PC to surf the Web and check e-mail, consumers may now choose a tablet. Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report. Louis Bedigian is the Senior Tech Analyst and Features Writer of Benzinga. You can reach him at louis(at)benzingapro(dot)com. Follow him @LouisBedigianBZ