Apple has placed orders for four million Apple Watches for the fourth quarter, targeting mainly demand from the year-end holidays. Sales of Apple Watch are expected to surpass 10 million units in 2015. With a plan to release a second-generation Apple Watch in 2016, Apple is currently talking to Inventec, Wistron and Foxconn Electronics (Hon Hai Precision Industry) to seek another manufacturer aside from Quanta Computer, according to a Chinese-language Apple Daily report.

Apple originally planned to place orders for six million Apple Watches for the fourth quarter, but has reduced the volume since demand for the device is not as strong as expected, the paper noted.

Apple's second-generation Apple Watch is expected to become available after the second quarter of 2016, the paper said.

Quanta has invested heavily in equipment for Apple Watch's manufacturing, but its profit return from the device has been weaker than expected. This is a concern for the ODMs that have been approached as a secondary supply partner, the paper added.