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Component Makers Caught in Apple's Revolving Door of Suppliers

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Hailey Lynne McKeefry
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Re: Positives in it too
Hailey Lynne McKeefry   10/31/2014 7:06:19 PM
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Businesses need to hold some balance between making good business decisions based on today and building relationships into the future. I read this, and i think less about Apple and its actions, which seem to be status quo for the industry, and think more about the component makers. It's a cautionary tale about not letting any one customer be the basis for your business. i understand that it would be hard to resist a big contract from Apple, but  at the same time the component maker needs to safeguard the business--by making sure it's customer base is broad enough that no one customer pulling its business can kill its chances.

Jacob
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Re: Bilateral Agreements
Jacob   10/31/2014 12:02:26 AM
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"Every contract has exit clauses and compensation is clearly mentioned if either party backs out. It is just that suppliers must ensure that their legal team works really hard in designing contracts with Apple. That can be difficult given Apple's upper hand but it is necessary."

Waqas, I agreed about such exit clauses and compensations. Based on the agreement; by expecting a good business and long term relationship companies/ vendors may invest highly for infrastructure. Normally In none of the clause such investments  will over under damages because infrastructure is with the company/vendor.

tech4people
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Re: Is not that business as usual?
tech4people   10/30/2014 1:08:52 PM
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Waqas,

What you are pointing out may make sense(in the Real World);Unfortunately that is'nt what happened with GT .

Instead Apple suddenly pulled the Plug on a Deal they had in place(&there is a lot more intrigue there which has'nt been disclosed exactly in the Bankruptcy Findings).

I would reserve my judgement until I see the Details of the Bankruptcy case myself.

Regards

Ashish.

tech4people
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Re: Bilateral Agreements
tech4people   10/30/2014 1:03:12 PM
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Waqas,

As the Recent Bankruptcy Proceedings of the Sapphire Glass Maker-GT has clearly demonstrated ;Apple has a lot of Very Powerful friends and Levers in all the Right places.

Even Media organizations like Reuters were shocked that the Entire Bankruptcy proceedings were sealed and not open to Public Scrutiny(even in Court).

Tells you a lot does'nt it?

Regards

Ashish.

 

tech4people
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Supply Network Guru
Re: You need to depend on atleast 2 different Customers
tech4people   10/30/2014 12:58:41 PM
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Waqas,

Unfortunately as both you and me know;we live in the Real World and here things are not quite so simple.

Especially all this talk of "Chinese Wall" between Investment Banking and Brokerage Divisions is just not realistic anymore.

Information gets shared over Multiple Mediums and in real-time today.

In such a Situation;all Consumers are better served by complete Seperation between Various Entities who are placing Bets on various Decisions today.

Regards

Ashish.

WaqasAltaf
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Supply Network Guru
Re: Bilateral Agreements
WaqasAltaf   10/30/2014 10:09:13 AM
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Jacob

Every contract has exit clauses and compensation is clearly mentioned if either party backs out. It is just that suppliers must ensure that their legal team works really hard in designing contracts with Apple. That can be difficult given Apple's upper hand but it is necessary.

WaqasAltaf
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Supply Network Guru
Re: You need to depend on atleast 2 different Customers
WaqasAltaf   10/30/2014 10:04:48 AM
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Ashish, corporate issues can be such where there is always a thin line between frauds and business decisions. Shareholders must ensure that audit committees and other bodies responsible for oversight function effectively otherwise management enters into deal while keeping the ownership in the dark.

WaqasAltaf
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Supply Network Guru
Re: Is not that business as usual?
WaqasAltaf   10/30/2014 10:02:23 AM
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_hm

"Also counter argument can be, when those supplier got big order from Apple, did not they ditch many of their faithful smaller customers? Yes, for sure. So now it is their turn."

Yes I agree. It is business as usual. Suppliers must be prepared when dealing with bigger companies specially if they have such a history whether it be Apple or their suppliers. 

WaqasAltaf
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Supply Network Guru
Positives in it too
WaqasAltaf   10/30/2014 9:58:09 AM
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Nicole, thanks for a very interesting article. Obviously this negatively potrays how Apple treats its suppliers but it also shows how agile Apple is in making big decisions in order to keep its product competitive/market leader. 

Jacob
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Supply Network Guru
Bilateral Agreements
Jacob   10/29/2014 2:10:59 AM
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"The arrangement began to crumble in September, when it became evident that Apple would not use sapphire material in its iPhone 6, replacing it with rival Gorilla Glass instead. Indications are that GT intends to pursue legal claims against Apple as the company reorganizes its business under bankruptcy."

Nicole, all the agreements are bilateral, so both parties are liable to abide that. In my knowledge based on the agreement and to cater Apple requirement, GT have expanded their facility by accommodating more employees and increased their production facility. Finally Apple pulled the legs, which pushed GT into some troubles. In my opinion Apple is liable to compensate for all such damages.

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