There have been reports emanating from Taiwan suggesting that a number of Apple upstream supply chain partners including the likes of Foxconn Electronics are looking for more money to build the tens of millions of devices that flow out of factories every year, citing the constant rise in the cost of Chinese labour.
According to Digitimes, another factor behind the demands are Apple’s stricter regime over the product manufacturing process and the uncanny habit the company has to conduct surprise inspections on factory floors.
Apple’s partners also claim that Apple may have started to lose its creative touch since many of its recent products like the iPhone 5 or the new iPad do not bring any ground-breaking or surprising features, only hardware improvements.
(opens in new tab)This in turn could mean that Apple may well, in the future, resort to cutting down on price to achieve market share, something the supply chain partners fear, could affect their overall profit margins.
Apple though is unlikely to cut down on price and may instead prefer to introduce new cheaper product ranges (like the iPad Mini) or downgrade existing flagship products (like the iPhone 4 and the iPhone 4S) when new lines are unveiled.
Source: Digitimes (opens in new tab)