In a bit of high-tech one hand washes the other, Apple is putting the squeeze on its suppliers, asking parts makers for a 10 percent price cut in light of huge demand for the iPad, according to a Tuesday report.
“Since Apple’s tablet PC shipments are expected to grow 70 percent sequentially to 8 million units in the second quarter, significantly benefiting related upstream component suppliers, Apple has demanded its suppliers provide cuts in return,” reports the Chinese-language Economic Daily News.
Manufacturers targeted include those producing touch panels, battery components and optical parts, the report adds. The request by Apple to lower iPad part prices doesn’t appear to be a one-time event. Even deeper cuts are expected to be required for the next financial quarter, when the Cupertino, Calif. firm will likely increase shipments, the publication writes, citing parts makers.
Given that Apple dominates the supplies of most of these components, we have a feeling Cupertino will get its way here. Don’t expect that 10% savings to be passed onto you this generation, though.
Ed Sutherland is a veteran technology journalist who first heard of Apple when they grew on trees, Yahoo was run out of a Stanford dorm and Google was an unknown upstart. Since then, Sutherland has covered the whole technology landscape, concentrating on tracking the trends and figuring out the finances of large (and small) technology companies.
12 responses to “Apple Cracks Whip on iPad Parts Prices”
This is excellent news. Apple’s (huge) margins are set long before the product goes to manufacturing. This means that they are actively seeking to reduce the costs, but *not* to make more ‘profit.’ In other words, the sell price might be going down.
so, basically apple is asking their parts suppliers to cut the prices on their parts, so they (Apple) can make more money off the devices. no wonder why they are raking in the dough.
Keep in mind that these cuts could have been written into the original contracts.
Sounds like our beloved Apple is using a few plays from the Walmart play book. Just remember folks, they already make BILLIONS of dollars off our purchase of their products, all at the backs of the poor people in China who slave away making these products. I guarantee you Apple squeezing their suppliers will lead to more quality control issues and poorer worker conditions..
By doing this, Apple can release an upgraded iPad – the iPad 3, and still have the same price tag!
Yea, kinda had the same thought. I am not someone who thinks that companies should not try to maximize profits and such but I think that a very large majority of Apple folks (stereotyping here) are more liberal and left leaning and their beautiful technology products are made in the same sweatshop conditions that their hated Wal-Mart are.
Enjoy the products (I do) but know where they came from and how they got to you and what profits Apple is currently making. Couldn’t Apple spend one or two of their billions on the workers making their products?