Apple to sell off unwanted offshoot

APPLE Computers has said it will sell a manufacturing facility in Colorado to SCI Systems to focus resources on its core businesses.

Since 1991, Apple's 360,000 sq ft facility in Colorado has made Apple's PowerBook laptop computers and desktop computers. It is one of two manufacturing sites in the United States that supply the US and Canadian market.

Under terms of the three year agreement SCI will make the products at the Colorado site.

Apple said about 1,100 employees work at the facility. SCI said it planned to offer employment to the majority of Apple workers, and expected to take over the plant in June.

Apple, which employs 1,500 people at its European manufacturing headquarters in Cork, recently warned investors it would post a second quarter loss of about 8700 million (£444 million).

"In addition, this arrangement offers Apple an opportunity to reduce both our product costs and inventory carrying costs," said Apple senior vice president for worldwide operations Mr Fred Forsyth. Inventory has been a costly problem for Apple.

A spokeswoman for Apple declined to disclose financial terms of the agreement, but she said additional details may become available when Apple reports quarterly results later this month.

The facility already manufactures computers for HewlettPackard, IBM and Digital.

Apple said it was not concerned about a drop in quality as a result of its decision to outsource manufacturing.