Weak sales by several key Apple suppliers has led to the Cupertino company “losing its mojo” in its famed supply-chain management, reads a new report.
A Bloomberg piece from Tim Culpan posits that Apple let its desire for innovation get ahead of its ability to source the necessary components for the iPhone X.
“Thanks to Taiwan rules requiring the disclosure of monthly sales, we can track endemic weakness at its exclusive processor maker Taiwan Semiconductor Manufacturing Co. and primary assembler Hon Hai Precision Industry Co.,” reads the report.
According to Culpan, Apple’s supply chain issues began with the decision to switch to an OLED display for the upcoming phone.
“When Cupertino decided to go with OLED, it must have known that supply would be tight and the company would be relying on nemesis Samsung,” reads the article. “Perhaps Cook and Williams were OK with this and figured Samsung would ramp up fast enough to ensure OLEDs for all, or maybe they thought alternative suppliers would come on stream. Clearly they were wrong.”
Apple’s decision to go with a button-free display design forced the company to develop another new technology in a Touch ID sensor that works through the display. This plan obviously didn’t work out, culminating in Apple’s Face ID technology.
“It failed and Apple had to dump the idea, instead turning to facial recognition,” reads the report. “This was already likely to be a feature, but with Touch ID now gone, Face ID was front and center (Apple couldn’t well go back to humdrum passwords). That means reliance on Romeo and Juliet, the two-part sensor module crucial to making it work. But again, Apple misjudged the supply chain and was left with bottlenecks.”
It seems hard to argue with these points, as the very late launch of the iPhone X was something clearly forced on the company. Over the weeks, multiple reports of supply chain issues have mounted up, and Apple may be facing the possibility of not being able to completely satisfy holiday demand for the phone.
However, this gamble was a necessity for Apple, as the company needed to release a phone that wasn’t an iteration of the iPhone previous. While Apple may be falling behind due to their vision, it’s a necessary vision that Apple needs to see realized.
