How mighty Apple blocks its competition

“Apple is a force to be reckoned with when it comes to the supply chain for gadgets,” David Goldman reports for CNNMoney. “It gives buyers what they want faster than its rivals — and in the process, it sometimes delays the competition’s products from coming to market.”

“Japan’s earthquake, tsunami and aftershocks halted or slowed production of hundreds of components that are found in consumer electronics devices, including the iPhone and iPad. Memory chips, touch screens, image sensors, batteries and the special resins that are used to hold chipsets together have all been in scarce supply lately,” Goldman reports. “Yet Apple sold a remarkable 18.7 million iPhones and 4.7 million iPads last quarter. COO Tim Cook said Wednesday that the company would suffer ‘no material supply impact’ in the current quarter, despite what he called ‘the mother of all backlogs’ thanks to very strong demand for the iPad.”

Goldman reports, “Apple aggressively uses its size and vast array of resources — including its very deep pockets — to get the deals it wants with component makers. The company sent executives to its Japanese suppliers literally with cash in hand to make sure supply remained adequate, said Brian White, supply chain and Apple analyst at Ticonderoga Securities.”

Read more in the full article here.


    1. At the end of the day, those supplyers also benefit by getting their cash in hand early. A win-win situation both for Apple and Japanese companies that have to struggle to hard times.

    1. Apple was scheduled to release the iPad2 days before the earthquake struck. They decided not to hold what amounts to a “celebration” at this time, as they are more focused on helping Japanese citizens (especially Apple employees) regain normalcy. It’s my understanding that there is no scheduled launch until they are sure that it would be the honorable thing to do.

  1. Not that it really matters ….. They aren’t selling many of the wanna be Upuds anyways ……

    And the cell phone guys will use anything and throw anything together as their product changes are measured in weeks, why should they care how well it works, so long as it works, there will be another model to replace soon enough …..

  2. Since the Japanese tsunami occurred on March 11th, I doubt it would affect component supply last quarter. It’s this quarter that might have been affected, and Apple seems to have taken care of it.

  3. The competition must be up to scratch in the first place for Apple to block it. For now the competition consists of retards like RIM, Google, Motorola Xoom and a handful of tablet competitors that look like they were designed in a Soviet collective.

    The Playbook launched to the sound of crickets. Nobody cared and nobody bought. There were non-existent lines and RIM is selling into an ever shrinking market of corporate IT doofuses. Once users latch on to the fact that they can bring their own technology to work, RIM’s share of the smartphone market will mirror the fall of Nokia in the handset market. They will be forced to sell their obsolete BBs to low margin countries like Africa and India.

    There’s no need for Apple to exercise supply chain-fu. These doofuses do a good job of committing harakiri by bringing out half baked products.

  4. Apple does NOT block its competition. No one is stopping their competitors from reducing their product lines to just a few SKU’s so that they have more power over their parts suppliers.

    Apple’s competition forces themselves to diversify their product line because so much of it is junk or just plain mediocre. It’s like they are on hamster wheels that go ever faster to distract consumers from poor designs by manufacturing more and more models faster and faster, but just like the hamster wheel, the competition never gets anywhere. As a result of their choices, their supply chains are weakened by poor demand.

    This headline is B.S.

  5. Apple is certainly not blocking its competition in the tablet industry. How much demand is there for Android Honeycomb tablets. Probably next to none. If those component suppliers had to depend on Android tablets for a living, they’d probably be bankrupt. Apple is buying components to fill the demand for iPad 2s. Nothing unusual about needing enough components to fill orders. I doubt if there’s a component manufacturer in the world that doesn’t want full payment up front. It sure must make things a whole lot easier when the money is already in their pockets. At that point, Apple is taking all the risks and not the supplier.

    I don’t hear any consumers crying about not being able to get their hands on a Honeycomb tablet, so what’s the big deal.

  6. I’m with you, Marc and LaughingBoy! I don’t think Apple needs to do much to limit sales of the other guys’ products. the competition does that for themselves by putting out shitty products… But… I know plenty of people who will still buy the crap, as do we all; so if Apple can push back timelines on the competition enough to let people realize the beauty of Apple products, then all the better. Maybe my brother, RIC CALVI, of San Marcos, California will finally buy an iPhone! If anyone knows him… Tell him his brother said his stupid droid phone sucks ass.

  7. “COO Tim Cook said Wednesday that the company would suffer ‘no material supply impact’ in the current quarter, despite what he called ‘the mother of all backlogs’ thanks to very strong demand for the iPad.””

    The author thinks the ‘backlog’ is the missing iPad parts when the ‘backlog’ is that the iPad assembling can’t keep up with the iPod demand.

    What a tool.

  8. MDN: Apple succeeded by having a 20-50 year plan in the bucket when they started the Mac. Networked, WYSISYG, Easy to use & learn personal computers.

    Easy to use means NOT CONFUSING USERS with 50 models.

    Apple’s few models, with mostly shared high quality components gives them tremendous buying power and yet their primary competitors don’t seem to have picked up on that.

  9. “It gives buyers what they want faster than its rivals — and in the process, it sometimes delays the competition’s products from coming to market.”

    What’s missing here is the fact that Apple pulled this off with UNPROVEN PRODUCTS. Meaning, Apple has had to have faith in the success of NEW PRODUCTS in the marketplace. Betting on the iPad being a brilliant success took balls. Apple grabbed up part resources BEFORE the first version of the iPad was known to exist outside Apple. That’s brilliant foresight and faith in the quality of one’s work.

    Bravo Apple!

    Better luck next year, wannabes.

  10. Apple is beholden to others — Intel, Samsung, Chinese / Japanese Companies — who all have their own agendas and desires to rule the world!
    Till Apple has control of its own destiny it can’t do anything to block the competition — Remember Microsoft in the 80’s.
    It needs its own factories in USA and other parts of the world!
    It has given away too much for free!

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