Apple Demanding Cost Cuts From Suppliers After 30% Plunge In Orders: Digitimes

Apple stock is sliding very modestly for now as Digitimes reports Tim Cook has asked downstream part and component suppliers in Taiwan to reduce quotes for iPhone 7 devices by as much as 20%...even though order volumes for new phones are reportedly 30% lower than those placed a year earlier.

Via Digitimes.com,

Apple has met resistance from makers in Taiwan's supply chain to lower their quotes for parts and components for iPhone 7 devices, a move which aims to force Apple to discontinue its established policy of constantly squeezing profits from Taiwan suppliers.

 

Apple is said to have asked downstream part and component suppliers, excluding Taiwan Semiconductor Manufacturing Company (TSMC) and Largan Precision, to reduce their quotes for iPhone 7 devices by as much as 20% even though order volumes for new phones are reportedly 30% lower than those placed a year earlier.

 

Major downstream suppliers, notably Advanced Semiconductor Engineering (ASE) and associated companies under the Foxconn Group, have replied Apple that they could not be able to accept orders without reasonable profits at this time.

 

Apple is leveraging the rising handset supply chain in China to force Taiwan-based companies to reduce their quotes comparable to those offered by China-based suppliers. But it makes no sense for such a requirment since the quality of products rolled out by Taiwan- and China-based suppliers is standing at different levels.

For now, it appears none of this matters...