iPhone-trioApple's demand that overseas suppliers lower their quotes for iPhone 7 parts and components has been met with resistance from makers, according to Taiwanese website DigiTimes.

Apple is said to have asked downstream part and component suppliers, excluding TSMC and Largan Precision, to reduce their quotes for iPhone 7 devices by as much as 20 percent, even though order volumes for new phones are reportedly 30 percent lower than those placed a year earlier.

Apple is reportedly using the rising handset supply chain in China to force Taiwan-based companies to make their quotes more competitive. However, DigiTimes suggests Apple's policy of squeezing out profits from Taiwan suppliers "makes no sense" because "the quality of products rolled out by Taiwan- and China-based suppliers is standing at different levels".

Whether or not quality is an issue, major downstream suppliers including Advanced Semiconductor Engineering (ASE) and associated companies under the Foxconn Group have told Apple that they cannot accept orders without reasonable profits.

Apple reportedly chose to exclude TSMC and Largan from its demands because the company is finding it hard to find alternatives that offer foundry services or high-end camera modules, respectively.

Meanwhile, ASE has seen its business grow steadily in recent years and optimized its advanced packaging technology by expanding its client base through a merger agreement with fellow company Siliconware Precision Industries (SPIL).

Foxconn Group, for its part, has acquired Japan-based Sharp, which will reportedly keep its production facilities busy, meaning there's no inclination for the electronic manufacturing subcontractor to sacrifice its margins to work for Apple.

Apple accounted for a 17.2 percent share of the global smartphone market in terms of shipment volume, but took as high as 91 percent of the industry's profits in 2015, according to data compiled by Canaccord Genuity.

Apple is expected to reveal the iPhone 7 at an event on September 7, and open up pre-orders on September 9. The specific launch date remains ambiguous, with both September 16 and September 23 mooted as potential options.

Related Forum: iPhone

Top Rated Comments

Stella Avatar
113 months ago
Good on them.

Apple want lower cost components in order to increase / retain their profit margin.

The consumer certainly won't benefit in the way of a lower priced phone.
Score: 29 Votes (Like | Disagree)
S.B.G Avatar
113 months ago
Apple is said to have asked downstream part and component suppliers, excluding TSMC and Largan Precision, to reduce their quotes for iPhone 7 devices by as much as 20 percent...
...major downstream suppliers including Advanced Semiconductor Engineering (ASE) and associated companies under the Foxconn Group have told Apple that they cannot accept orders without reasonable profits.
Probably because Apple wants to increase their profit margins for their next quarterly earnings call so it won't appear that their numbers will be down as much again.
Score: 24 Votes (Like | Disagree)
Porco Avatar
113 months ago
Apple are rumoured to have said "You want HOW MUCH for 3.5mm headphone jack sockets?!"
Score: 18 Votes (Like | Disagree)
radiology Avatar
113 months ago
If suppliers lowered their margins, the only people loosing would be the factory workers who already make very little money. Apple knows this. This to me is as close as it gets to slavery. Apple = hypocrite.
Score: 14 Votes (Like | Disagree)
samcraig Avatar
113 months ago
So Apple goes to these manufacturers and says - we're ordering less, so we want a greater volume discount. On what planet does that work? Apple's profit margins are of no concern to these companies. They are businesses just like Apple. If one is to take Apple's side because they are a stockholder, I get it. It never hurts to ask or try to negotiate. But you can't fault these companies for looking out for their best interests too.
Score: 14 Votes (Like | Disagree)
radiology Avatar
113 months ago
It's almost as if Apple is functioning as a business or something. How crazy is that?
Don't forget that businesses have social responsibility (at least that's what Apple's CEO claims).
Score: 9 Votes (Like | Disagree)

Popular Stories

iOS 19 Mock WWDC25 Feature

iOS 19 Expected to Run on These iPhones

Monday March 31, 2025 5:28 pm PDT by
iOS 19 will not be available on the iPhone XR, iPhone XS, or the iPhone XS Max, according a private account on social media site X that has accurately provided information on device compatibility in the past. The iPhone XR, iPhone XS, and iPhone XS Max all have an A12 Bionic chip, so it looks like iOS 19 will discontinue support for that chip. All other iPhones that run iOS 18 are expected...
watchOS 11 Thumb 2 1

Apple Releases watchOS 11.4 With Sleep Alarm Update

Tuesday April 1, 2025 10:34 am PDT by
Apple today released watchOS 11.4, the fourth major update to the operating system that runs on the Apple Watch. watchOS 11.4 is compatible with the Apple Watch Series 6 and later, all Apple Watch Ultra models, and the Apple Watch SE 2. watchOS 11.4 can be downloaded on a connected iPhone by opening up the Apple Watch app and going to General > Software Update. To install the new software,...
AirPods Pro Firmware Feature

Apple Releases New Firmware for AirPods Pro 2 and AirPods 4

Monday March 31, 2025 11:27 am PDT by
Apple today released new firmware updates for all AirPods 4 and AirPods Pro 2 models. The new firmware is version 7E93, up from the 7B21 firmware that was installed on the AirPods Pro 2 and the 7B20 firmware available on the AirPods 4 and AirPods 4 with ANC. It is not immediately clear what new features or changes are included in the new firmware, but we'll update this article should we find ...
maxresdefault

Apple Releases iOS 18.4 With Priority Notifications, Ambient Music, New Emoji and More

Monday March 31, 2025 10:03 am PDT by
Apple today released iOS 18.4 and iPadOS 18.4, the fourth major updates to the iOS 18 and iPadOS 18 operating system updates that came out last year. iOS 18.4 and iPadOS 18.4 come two months after Apple released iOS 18.3 and iPadOS 18.3. Subscribe to the MacRumors YouTube channel for more videos. The new software can be downloaded on eligible iPhones and iPads over-the-air by going to...
iPhone 17 Pro 34ths Perspective

iPhone 17 Pro Launching Later This Year With These 10 New Features

Sunday March 23, 2025 10:00 am PDT by
While the iPhone 17 Pro and iPhone 17 Pro Max are not expected to launch until September, there are already plenty of rumors about the devices. Below, we recap key changes rumored for the iPhone 17 Pro models as of March 2025: Aluminum frame: iPhone 17 Pro models are rumored to have an aluminum frame, whereas the iPhone 15 Pro and iPhone 16 Pro models have a titanium frame, and the iPhone ...
Apple Card iPhone 16 Pro Feature

Visa and American Express Vying to Win Apple Card Deal in 'Fierce' Fight

Tuesday April 1, 2025 1:50 pm PDT by
Visa wants to pay Apple approximately $100 million to be the new payment network for the Apple Card, reports The Wall Street Journal. As of right now, the Apple Card is on the Mastercard payment network, but that is set to change because Apple is ending its partnership with Goldman Sachs. Both American Express and Visa are vying to replace Mastercard as Apple's card services provider, while...
iOS 18

Apple Seeds First Beta of iOS 18.5 to Developers

Wednesday April 2, 2025 10:11 am PDT by
Apple today seeded the first betas of upcoming iOS 18.5 and iPadOS 18.5 updates to developers for testing purposes, with the software coming just two days after Apple released iOS 18.4 and iPadOS 18.4. iOS 18.5 and iPadOS 18.5 can be downloaded from the Settings app on a compatible device by going to General > Software Update. We don't yet know what Apple is introducing in the iOS 18.5...