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-Watch-2-concept-by-Eric-Huismann-780x439
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.

4-inch iPhone 5se may not be enough to reverse slowing iPhone sales

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Don't call it the '5se'.
A mockup of what a smaller iPhone may look like.
Photo: Martin Hajek

Apple is widely expected to break with tradition by introducing its much-rumored 4-inch iPhone 5se in March, but despite predictions that this could net Apple an extra 10 million+ unit sales per year, it may not be enough to reverse the larger trend of slowing iPhone sales.