It’s getting even tougher to be an Apple supplier

“Imagination Technologies Group Plc discovered how fickle life can be as an Apple Inc. supplier when it was ditched this month by the iPhone maker,” Alex Webb and Ian King report for Bloomberg. “More suppliers may suffer the same fate as the world’s largest technology company faces a shrinking number of semiconductor makers and expands into areas that need special chips designed in-house.”

“Dialog Semiconductor Plc, Synaptics Inc. and Cirrus Logic Inc. are particularly vulnerable to Apple’s supply chain whims and demands, according to analysts,” Webb and King report. “One component supplier, Avnet Inc., stopped working with Apple because the relationship was squeezing its profit margins too much.”

“Apple has developed its own processors for years, but has stepped up in-house design of components, including graphics, Bluetooth and other smartphone-related chips, in recent years. That’s expensive, and creates new risks, but it helps the company maintain leverage over suppliers as a recent wave of acquisitions cut the number of chipmakers it works with,” Webb and King report. “Cost isn’t the only incentive for Apple to develop its own components. It also helps the company couple its hardware more seamlessly with its software.”

Read more in the full article here.

MacDailyNews Take: This is nothing new, just accelerated, now that Apple has the cash and ability to do basically whatever it wants.

• I’ve always wanted to own and control the primary technology in everything we do. — Steve Jobs, October 12, 2004

• In order to build the best products, you have to own the primary technologies. Steve felt that if Apple could do that — make great products and great tools for people — they in turn would do great things. He felt strongly that this would be his contribution to the world at large. We still very much believe that. That’s still the core of this company. — Apple CEO Tim Cook, March 18, 2015