_hm, Tim Cook's neck is not on the line even if Apple's performance deteriorates and that's not really the case here. The company doesn't have another big name executive waiting in the wing but I am sure they won't have problems replacing him.
It is becoming a difficult markets for others in smartphone sector. Apple should look beyond one i - phone making in world markets. Today, Samsung marked 100million sale of just a product( Samsung Galaxy S II) amongst its many smartphone brands. Yet, it's still selling more on its Note III, ACE and others.
Apple's push-out of orders is a wake-up call for suppliers that have invested the majority of their resources in one customer. These are Apple suppliers that, in order to support Apple's demands, have turned away business from other customers. They will soon be pleading with those other customers for a second chance. The ripple effect will result in extra factory capacity throughout the supply chain, including second and third tier suppliers, and suppliers will be scrambling to fill that capacity by offering component prices below market as an incentive to gain design approval as a second or third source.
Apples vulnerability is its dependence for critical components on its competitors. Samsung is world leader in display technology, memory chips and is going really gung ho. They have deep expertise and capabilityin Physics, design and manufacturing. To stay ahead of the pack in established products like SmartPhones & Tablets, Apple will have to create a deep bench itself. Won;t hurt if Apple brodened its supplier base and went back to Japan, in spite of Japan being 20 % more expensive than So. Korea or Taiwan. Of course Apple can squeeze a few more years of high margin by bringing out entirely new products like a networked TV.
Bolaji: I agree regarding suppliers. Normally, I'd suggest they take their business elsewhere, except in this case, Samsung is so vertically integrated that suppliers will have less of an opportunity. Even at a competitive price, Samsung could probably beat it. I think a few key select suppliers whihc already have inroads are well positioned at Samsung. I would also think that Apple uses suppliers common to many of its products, so maybe they'll spread some of that sell around. But Apple's cuts will definitely hurt the supply chian at large.
Another reason for Apple reducing current order is that they may be coming out with new iPhone! Good products by Samsung and other. Lower cost is good for consumer. Apple must reduce cost of their product.
There may be a simpler explanation for the reduction in components orders by Apple. It's not such a huge surprise that demand drops at the start of a new year. Any surge in demand during the holidays usually results in a big drop off in the first quarter and most companies anticipate this and signal to suppliers ahead the need to cut supplies.
Apple may not have done this initially because expectations have always been that the company would defy the traditional post-holiday sales lull. That's obviously no longer the case. Competitors' products are better and demand for them stronger.
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
While no one really can accurately predict the future, we can take guidance from another Drucker saying which is the best way to predict the future is to create it.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.