Apple’s cost-cutting strategy draws ire of Chinese supply chain

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Tim Cook meeting an iPhone manufacturer in China.
Tim Cook meeting an iPhone manufacturer in China.
Photo: Apple

With iPhone demand slowing down, one of the ways in which Apple is hoping to increase earnings is by pushing its suppliers to work for less money — but it doesn’t seem to be going entirely to plan.

According to a new report, Apple is meeting resistance from manufacturers in its Taiwan-based supply chain as it requests that they lower quotes for iPhone 7 components by as much as 20 percent.

Weak iPhone demand punishes Apple suppliers

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The iPhone's camera is getting a big update.
Apple isn't the only one suffering due to weak iPhone sales.
Photo: Ste Smith/Cult of Mac

Weak demand for the iPhone is causing earnings to fall for a number of suppliers in Asia, and few of them are hopeful that the situation is going to change.

Foxconn, the biggest assembly partner for the iPhone, saw its profit fall 9.2 percent last quarter, while Pegatron’s nosedived a whopping 35.1 percent.

Apple starts ordering Apple Watch 2 components

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Apple's diversifying its supplier base for the next-gen wearable.
Photo: Eric Heisuman

There may be disagreement over when exactly Apple Watch 2 will arrive, but Cupertino is confident enough about its plans to start divvying up component orders among companies in its supply chain.

In keeping with its recent strategy, Apple is looking to diversify its supply chain for the second-gen wearable by taking on additional manufacturers.

Apple Profit Probably Fell For The First Time In A Decade

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Tim Cook, Phil Schiller and others sold Apple stock at a time when it was hitting record highs.
Tim Cook, Phil Schiller and others sold Apple stock at a time when it was hitting record highs.

Apple’s quarterly profit probably fell for the first time in over a decade, thanks to new products with lower profit margins and a slowing demand for the iPhone, Bloomberg reports. Fourteen analysts have reduced their estimates for Apple in recent weeks, and on Friday, the Cupertino company’s share price fell below $400 for the first time since December 2011.

Apple Nicknamed “Poison Apple” By Suppliers As iPhone Demand Becomes Unpredictable

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Apple’s hard-to-meet high standards and its low price expectations have earned it the nickname “Poison Apple” with Asian suppliers, who say they are feeling the affects of decreasing demand of the iPhone. Several have told Reuters that they are trying to reduce their reliance on Apple amid increasing competition from companies like Samsung.

iPhone 5S Components To Begin Shipping In May Ahead Of A Q3 Launch [Rumor]

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Apple’s suppliers are to begin shipping components for the next-generation iPhone by the end of May, ready for the handset’s launch during the third-quarter of 2013, according to sources in the supply chain. As suspected, the device won’t be a major upgrade, the sources claim, but rather a “slightly enhanced” version of the iPhone 5 that’s likely to be called the iPhone 5S.