Apple Demands Price Cuts From Suppliers To Keep Its Margins [Digitimes]

In an effort to keep its high gross margins, Apple has been demanding lower prices from its suppliers, according to sources from the upstream supply chain, as cited by Digitimes. The company is also seeking new suppliers to add to its supply chain.

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The Digitimes report names several of Apple’s well-known component manufacturers (Largan Precision, Foxconn Electronics, Pegatron) as affected by the demanded price cut. The majority are facing “strong competition” from other component suppliers, as noted by the Taiwanese news outlet.

Allegedly, the most-affected manufacturers are those based in Japan, since their quotes are usually higher. As for China-based manufacturers, they seem to have an advantage in pricing, but their financial instability, product quality, and yield rates apparently give Taiwan-based suppliers an advantage in winning orders, Digitimes adds.

Apple is widely expected to unveil the iPhone 7 this fall. The new handset will resemble the iPhone 6s in terms of design, with minor changes such as a bigger camera – possibly a dual camera for the 5.5-inch model – and all-in-one Lightning port. Rumour has it Apple will finally increase the storage of the entry-level iPhone to 32 GB this fall, alongside adding higher-storage tiers.