JPMorgan: Apple looks to further diversify supply chain, shifting to transaction model for assembly

“There have been signs that Apple Inc. is looking to further diversify its supply chain, and now a group of analysts at JPMorgan believe the company is shifting from a partnership model to a transaction model for assembly of its products,” Michelle Jones reports for ValueWalk.

“Currently Apple Inc. uses more than one vendor with its components, although so far that strategy has been more limited in terms of the companies which actually build Apple products,” Jones reports. “However, JPMorgan analysts believe that the company is shifting toward using multiple vendors for assembly as early as next year.”

Jones reports, “Reports have suggested that Apple Inc. is looking to add two or more companies two its supply chains. Wistron and Compal Communications are two company names that have been floated by one analyst as being added to the company’s supply chain… Quanta Computer, which has been an assembler of Apple Inc.’s Mac computers for quite some time, could end up becoming the company’s second big supplier, especially if rumors that it is working on the iWatch are true.”

Read more in the full article here.

MacDailyNews Take: Good news.

[Thanks to MacDailyNews Reader “Bill” for the heads up.]

12 Comments

  1. What a nonsense expert. Apple uses multiple assembly contractors for years already. Of course, it could not be too many of them; the current three is more than enough as otherwise it would be more costly and quality would be harder to manage.

    1. Are you that clueless?

      Having more competitors in a “transactional” model means that there is a possibility for Apple to apply pressure on their assemblers if needed.

      Also, as Apple diversifies their product lines, specialiEd assemblers are needed and more of them.

      As demand grows, certain assemblers cannot meet demand as their assembly lines are already at capacity (I have no idea if the latter is true of any particular assembler, but it is possible).

      So, with just these considerations, your comment of “three is enough” is utterly ridiculous.

  2. The only problem I see with having many assemblers is there will likely be a lot of product leaks and they’ll be harder to pin down. Apple was known for being secretive, but it seems for the past few weeks there’s been so many videos and still photos of the new iPhones.

    1. I think you have effectly nullified your own argument.
      You are correct that years ago (when apple was not yet considered “the” premiere innovator in the computer and personal electronics) Apple did manage some secrecy up to product launches. However since it has become the industry innovation thief partners have not managed to keep a lid on a single product (up till launch)
      So, if “partners” aren’t secure anyway why would it be a downside to a transactional model?
      I think do think you are correct though. Apple will have to start announcing products ahead of actual production and or beta cycle (like they did with the new MacPro) to have any surprisse at their product announcements.

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