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Apple’s Absence In The Supply Chain Could Mean Trouble For Manufacturers

Not only is Apple responsible for reshaping the expectations of both the markets and its consumers, but the company also plays a big part in the growth of its supply chain.

According to a research note from Citibank analyst, Jim Suva, without Apple, the group of companies currently providing components for iDevices would report "negative growth."

"Projected annual sales growth in the supply chain has slowed significantly and is expected to be +1.5 per cent y/y in June, well below the 5-year and 10-year averages of +4.2 per cent y/y and +6.8% y/y, respectively," states Jim Suva.

He also predicts "year over year, Apple on a dollars basis is expected to [be] outgrowing overall tech supply chain in the June quarter." This leads to the conclusion that without Apple, the supply chain is shrinking.

The Citibank analyst splits Apple's partners into three major categories: "the upstream suppliers" - such as the manufacturers who provide semiconductor chips; "hubs" - commonly known as the distributors; and the "downstream vendors" - including wireless equipment and PC hardware suppliers.

Apple is always seeking out new suppliers capable of delivering new technologies for its next generation devices. Reports from Asian media sources suggest that for the rumoured iPad mini, LG and AU Optronics have recently been approved, while for in-cell displays, the same companies might have been overlooked.

Source: CNET

Radu has been working as a freelance writer for more than five years and has been blogging around since 2004. He is interested in anything Apple as well as gaming and mobile applications.