Apple ripples trouble multi-billion dollar pool of suppliers
AppleInsider Staff
Negative media attention and reports of sales underperformance have roiled the waters at Apple, and that disturbance has had ripple effects in the iPhone maker's multi-billion dollar supply chain environment.
Apple's line of iDevices is said to be experiencing softening demand.
Monday brought word from yet another Apple supplier that demand for the company's bestselling iPhone and iPad may be softening, as LG's financial filings were largely overshadowed by analyst estimations that the company's figures indicated slowing growth in iPhone sales. As the iPhone maker prepares to reveal its earnings for the past three months, the negative press and investor environment surrounding Apple is beginning to impact the fortunes of its suppliers, according to Reuters.
For some time, Apple has been a reliable customer for a wide array of suppliers around the globe, but particularly in Asia. Now, some of those suppliers are claiming apple has missed component orders on some products, leading some to believe that things are amiss in Cupertino, especially in light of increased competition from a number of other players.
Apple's supposedly slipping deadlines, according to Reuters, have led some suppliers to try to reduce their reliance upon Apple, as the company is already notorious for high standards and low price expectations that can make it difficult for some suppliers to grow their own margins.
The feedback effect between Apple's suppliers and the company itself can be seen in the story of Cirrus, supplier of audio chips that are featured in iPhones and iPads. On Wednesday, Cirrus reported weak demand for its products, 90 percent of which are said to go into Apple's wares. The resulting speculation pushed shares of AAPL below $400 for the first time since 2011.
Charles Martin
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1 Comment
These stories are mainly BS. They come from 'sources' that are likely fake. Or they are simply bad interpretation of the facts. The LG story is that demand is done from last quarter. It likely is. Because last quarter was the launch and holiday, both of which are inflated periods. For most retail something like 70-80% of sales are during the Christmas Holiday shopping. The months after that are down by nature. Any supplier knows this. In particular an Apple supplier since launch also means higher than typical sales and often double and treble orders for a month or so to ensure enough units that meet QA. The analysts are ignoring these facts and trying to paint it that iPhone, iPad etc sales have bottomed out cause everyone is buying the Surface etc when the facts and logic don't back up this kind of 'sky is falling' talk. Everyone keeps asking what Apple needs to do to fix the problem, such as a new amazing totally redone everything, fire Tim Cook and so on. All they need at this point is to sue the hell out of the analysts, bloggers etc to force them to shut up because they are the ones doing the most damage.