Strong iPhone 13 sales make camera suppliers prioritize Apple

Demand for the new iPhone 13 range has seen Taiwan-based camera component suppliers give priority to Apple over Samsung, and Chinese phone companies.

Apple has previously benefited from processor manufacturer TSMC prioritizing it during the global chip shortage. Now camera lens component companies are also electing to service Apple's requirements, specifically because of demand for the iPhone 13.

According to Digitimes, Taiwan-based makers of camera components such as voice coil motors, wire winding, and more, are seeing higher and more stable profits from Apple.

Reportedly, Samsung sold fewer smartphones in 2021 Q3 than was expected. At the same time, Chinese manufacturers including Oppo, Vivo, and Xiaomi, are already holding high inventory levels.

Separately, pre-order demand for the iPhone 13 in China exceeded 5 million, and overwhelmed Apple's site. Then as the new models arrived in China stores, stampeding crowds halted the iPhone 13 launch.

3 Comments

FileMakerFeller 1561 comments · 6 Years

About 3 years ago

I call BS. These suppliers have been falling over themselves to supply components to Apple because of historic demand, not because of current product demand. Apple requires huge quantities of components, supplied at specified times, and pays for the privilege. These companies will face penalties for not supplying Apple to the best of their ability, and that is what is driving them to prioritise Apple as a customer.

The component suppliers don't immediately care if their customers hold large amounts of finished goods inventory; it's only when new products are delayed while said inventory is cleared out that will affect their sales. And Apple has a long and distinguished history of selling new products every year, so they provide predictable demand.

genovelle 1481 comments · 16 Years

About 3 years ago

FileMakerFeller said:

I call BS. These suppliers have been falling over themselves to supply components to Apple because of historic demand, not because of current product demand. Apple requires huge quantities of components, supplied at specified times, and pays for the privilege. These companies will face penalties for not supplying Apple to the best of their ability, and that is what is driving them to prioritise Apple as a customer.

The component suppliers don't immediately care if their customers hold large amounts of finished goods inventory; it's only when new products are delayed while said inventory is cleared out that will affect their sales. And Apple has a long and distinguished history of selling new products every year, so they provide predictable demand.

Large amounts of finished goods that are not selling as planned equates to canceled orders and lost component sales for suppliers. That means their production lines dedicated to those products shut down unexpectedly and they layoff employees. So, if a new phone’s sales are off by 20% for 3-4 months, the glut will force pauses in production and canceled orders.