Supply Chain Changes brought by Apple’s Adjustment
Since late last year, Apple began to drop into a series of troubles, such as iPhone 5 quality problem, lower-than-expected shipments, apology to Chinese consumers for the different sale service…Recent PRISM rumor colder the confidence of Apple fans. How to disperse the large black clouds on his head becomes Apple’s top priority.
In terms of the PRISM plan, maybe Apple’s involvement is not a rumor, but as a user of iPhone, I really want to sign “Luckily, I am not a government staff, and I never use my phone to talk about any business, otherwise, I have to keep worrying any possible disaster.” In fact, due to government intervention, all phones in the market may also show such keyhole report; if so, I only want to say “Apple, you are so unlucky.” But whatever, the bad result is here.
Facing the beat of different negative news and the strong growth of competitors, especially Samsung, Apple has to act in all links. In the article of Apple Preps Supply Chain for Battle Ahead written by Nicole Lewis, we can find Apple’s plan, enticing consumers to turn in their old iPhone models for an iPhone 5, introducing low-end iPhone and auditing many suppliers…As the hope and order sources of many companies, technology giant-Apple achieving adjustment undoubtedly will generate a lot of supply chain changes.
Taking splitting orders to new suppliers as example, according to DIGITIMES, it is reported Apple is planning to split its upstream orders among 2-3 makers instead of relying on only 1-2 major makers. On the basis of sources from upstream supply chain, this move will first have an impact to Electronics manufacturing service (EMS) providers. Currently, Apple is said to have already invited both Wistron and Compal Communication to join its manufacturing roll. And Foxconn’s recent business behave seems tell the order volume decline with Apple.
Launching low-end phone is another strategy. First let’s leave aside the supply chain change. Can this plan really work? Apple, in the heart of consumer, is the representative of luxury, high end and wealth; but when low-end iPhone can be available to everyone, Apple will win more fans or less? Then come to supply chain change, although Apple wants to completely break up with Samsung, but due to some components demand, Apple has to reply on Samsung; the low-end iPhone move offers opportunities to other parts supply, such as MediaTek, which benefits shaking Samsung’s dominance and Apple’s relines.
As a matter of fact, there are other sources forcing Apple to do so. Due to the high price of high-end smartphone and resulting slow replacement wave as well as years of development, high-end smartphone market shows sighs of saturation（See Galaxy S4 Sales Expectation Decline & Supply Chain Fluctuates）; but given the huge market potential in emerging markets such as China and India, mid and low-end smartphone are very popular, so what Apple comes across is a dilemma.
Whether Apple’s adjustment can achieve positive result or not, only time can tell.