“When Apple Inc. Chief Executive Officer Tim Cook unveils the company’s new smartphone tomorrow, he will also crown the latest winners in the iPhone economy,” Adam Satariano and Peter Burrows reports for Bloomberg.
“For makers of screens to suppliers of power amplifiers, the iPhone serves as a trophy for companies in the behind-the-scenes business of supplying Apple with components for its devices,” Satariano and Burrows reports. “With $171 billion in sales in its last fiscal year — on par with the gross domestic product of Vietnam — Apple plays kingmaker by picking who provides semiconductors, graphics processors and other parts, helping to determine the fate of companies from California to China.”
“Apple has a reputation as a tough negotiator with suppliers and has shown little loyalty if it can get a better price or more advanced technology elsewhere, said Francis Sideco, a senior manager at IHS Inc., which studies components used in the iPhone,” Satariano and Burrows reports. “‘They aren’t in it for charity,’ Sideco said. ‘Apple typically hasn’t shown any undue loyalty to any one supplier, and just because you’re the guy that’s there, they aren’t going to stick with you because you’re the incumbent.'”
Read more in the full article here.
Crock of shirt. Apple may be a tough customer but if you are an Apple supplier, you are the best and you are making lots of money if you deliver on your promise. Intel is CRAZY over not having the iPhone. Samsung went “Holy profit decline, Batman” when Apple stopped buying some of their components. The premise of this article is ridiculous. Apple rewards supplier performance with loyalty. Screw up and you may hand business to your competitor.
The “kingmaker” stuff in this article is total B.S. They make it sound like Apple arbitrarily picks companies to elevate to the royal winner’s circle.
As you stated, Apple goes with the companies that position themselves as winners – the companies that produce the best, most capable, reliable, and well-designed components and are capable of delivering in large volume at reasonable cost.
What the digs at Apple for a lack of “loyalty” ?
They sure have given ScamSung a lot of business despite the thieving bastards ripping off the trade dress of iOS and the iPhone.
I don’t like Samsung, either. But how many vendors can produce cutting edge electronic components in large volumes that meet Apple’s exacting specifications?
Say what you will about Samsung, but the company has some enviable production resources. Apple has been gradually diversifying its supplier chain, but it has been difficult and it takes time. When you are selling 50M or more units in a quarter, you need a reliable and capable supply chain.