How Suppliers Avoid Using Apple’s Name to Maintain Secrecy: Report
Apple’s suppliers refrain from mentioning the company by name, not even in private conversations or their annual reports — reports The Wall Street Journal.
It’s no secret that Apple likes to keep its business hush-hush until it’s ready to take a product to market, but just how much confidentiality does the tech giant expect from its suppliers?
GT Advanced Technologies, a former Apple supplier, revealed in a 2014 court filing related to bankruptcy proceedings that the confidentiality agreement it signed with the iPhone maker imposed a fine of $50 million USD “per occurrence” for breach of secrecy.
What’s more, the Cupertino, California-based tech giant can award or snatch away contracts for electronic parts and services worth hundreds of millions of dollars. To many of its suppliers, Apple is one of their biggest customers.
For fear of accidentally breaching confidentiality — Apple’s non-disclosure agreements with suppliers cover not just information pertaining to products but the existence of a business relationship with Apple itself, or offending someone, most of the company’s suppliers refrain from using its name altogether.
By most of its Asian suppliers, Apple is referred to as “the fruit company,” “the three-trillion-dollar company,” “the honored North American customer,” or “the big A.” China even has a name for manufacturers working with Apple: the “fruit chain.”
Some Japanese suppliers even call the company “Fuji,” after a variety of the fruit that’s grown in Japan.
In a January securities filing, O-Film Group, a Chinese manufacturer of smartphone camera modules, said it expected to post a loss of up to $426 million in 2021 after it lost the business of “a certain customer beyond these borders.”
Taiwan Semiconductor Manufacturing Co. (TSMC), which produces processors and other chips for Apple, mentioned the iPhone maker twice in its annual report, but never as a customer. Instead, TSMC named the tech giant as an issuer of bonds held by the chipmaker.
Even Samsung Electronics Co., Apple’s leading rival across the globe, sometimes refers to Apple with the nickname “LO”, short for “Lovely Opponent,” said people familiar with the matter. Samsung supplies screens and other parts to Apple.