Taiwan-based Compal Electronics has lost its contract to manufacture Apple's 17-inch PowerBook following cost-sharing issues, reports claim.

Sources told DigiTimes that Apple is looking to shift production of the 17-inch PowerBook from current contractor Compal Electronics to Quanta Computer – the company that manufactures the 17-inch iMac – in the first quarter of next year.

According to sources, Compal has been asking Apple to share the losses resulting from low yield-rates for the 15-inch and 17-inch notebooks, and the additional costs it incurred on PowerBook development. The sources say Apple is not accepting these demands.

However, according to DigiTimes' sources, Apple's relationship with Compal may not be over. In June Compal won the contract to build a 15.4-inch PowerBook – which will replace the 15.2-inch model made by Quanta. This decision was apparently aimed at minimizing production risk and enhancing competitiveness, the sources added.