What is Apple's Smartphone Technology Component Strategy?

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3Q 2018 | IN-5177


The Changing Shape of Apple’s Strategy


Apple is well-known for sourcing its components from at least two suppliers or changing its main supplier over time, with the goal of reducing risk and increasing negotiation ability. Recently, the company announced to its suppliers that there will be a 20% drop in orders for iPhone parts, despite the fact that three new models will be added to its list later this year. The company also recently lowered its Power Management Integrated Circuit (PMIC) order numbers with Dialog Semiconductor by 30%. There are a number of explanations for this drop: Apple could be being conservative regarding the number of iPhones it expects to sell throughout the year or it could be looking to take some of this technology production in-house.

The company has been known to modify its supplier strategy, changing which companies supply the parts over time. Most recently, Apple is moving its alliance for iPhone modem chips from Qualcomm, which has provided the chips for iPhones since 2011, to Intel, with the latter set to supply 70% of modem chips to Apple’s new smartph…

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