Apple is working on a Mac netbook, or tablet design, for an October release according the latest rumours despite the company's low opinion of the popular compact ultra-portable laptop design.

The usual unnamed sources are quoted by Taiwanese news site InfoTimes and the China Times and claim that three Apple suppliers, Foxconn, Wintek, Dynapack have all received direct orders from Apple to begin manufacturing the long rumoured device.

According to a post at MacRumors, any Apple netbook with come with a 9.7-inch touchscreen making it smaller than some netbooks already available.

"According to reliable information, Apple will not follow the current market trend (by producing netbooks with screens about 10.2 or 10.1 inches in diagonal length.) Instead, Apple will produce screens with about 9.7 inches in diagonal length. Touch screen will be installed. Wintek will be the main manufacturer of the touch screen," runs the report.

The inclusion of a touchscreen is likely to bump the retail price up significantly, well above the anticipated $500 mark hoped by many observers. MacRumors suggests a price of $800 is more likely, taking the cost to between £600 and £700 in the UK, should any such Apple netbook materialise in time for the all important Christmas market.

It is worth noting that the 320GB Mac mini is currently $799 in the US store, and £649 in the UK store. This would make the proposed Apple netbook slightly cheaper than the current White Polycarbonate MacBook, but substantially more expensive than other netbooks on the market.

Apple's smallest, lightest laptop the MacBook Air currently retails at £1,149, a recent price drop from £1,271.

Apple has long said that it has little interest in producing a Mac netbook due to poor user performance. Problems cited by Apple include cramped keyboards and small screens. However, back in February this year, analyst Toni Sacconaghi of Sanford C. Bernstein & Co met with Apple's top brass, and suggested Apple had "ideas" for a Mac netbook.

Sacconaghi chatted with Apple's Chief Operating Officer Tim Cook, then covering for CEO Steve Jobs during a leave of absence, Apple's Chief Financial Officer Peter Oppenheimer and Apple's marketing chief Phil Schiller.

In May, Piper Jaffray analyst Gene Munster, predicted an Apple tablet computer was being developed but wouldn't see the light of day until 2010. "We expect the development of such an OS to be underway currently, but its complexity, along with our conversations with a key company in the mobile space, leads us to believe it will not launch until CY10," Munster said.

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