Roger Fingas
A variety of Apple suppliers — including some stalwarts — are reportedly being hit by lower price quotes from the company, which is likewise said to be searching for new suppliers to maintain high profit margins on its products.
Companies like Largan Precision, Pegatron, and even Foxconn are being impacted, DigiTimes sources claimed on Tuesday. Largan for instance is allegedly facing competition for camera module orders from Japan's Kantatsu, while Foxconn and Pegatron are both dealing with Apple adding new manufacturers such as Wistron.
Wistron has previously been rumored as a third manufacturer for the "iPhone 7," along with Foxconn and Pegatron. Using multiple manufacturers allows Apple to both keep up with demand and force suppliers to accept lower prices for fear orders will be lost to competitors.
Taiwan's printed circuit board makers are meanwhile said to be slashing prices in a bid to win Apple orders, with only two firms — Flexium and Zhen Ding — holding onto stable profits. To compensate, companies are trying to expand orders with other clients while improving technologies, yield rates, and output quality to gain an edge.
Japanese suppliers are said to be taking the hardest hit from Apple's lowballing, since their own quotes are usually higher than rivals based in China and Taiwan. Chinese firms are claimed to have the upper hand in pricing, but suffer from problems in quality, yield rates, and unstable economics.
Andrew O'Hara
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35 Comments
"lowballing"???The article uses the term "quote" when referencing Apple's actions. The supplier quotes and Apple bids for parts. Perhaps some of these manufacturers should stop providing loss-leader parts to the loss-leader handset manufacturers. They are complacent in the "race to the bottom" that seems to be in vogue these days.
iPhone - made from the cheapest parts available. How comforting. Good thing that you you don't get what you pay for.
It's the same way the automakers operate.
Great. Now that Apple established the most reliable smartphone ever, here comes the cost-cutting and associated decreases in reliability. Similar attitudes and actions have bruised Honda's reputation.
Just business as usual. Large businesses have more pull with regards to pricing. Diversifying suppliers is what they have always tried to do and is a good thing. Competition is good right?