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Thread: Current Apple Suppliers Share Insight on What It's Like to Work with Apple

  1. #1
    What's Jailbreak? Akshay Masand's Avatar
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    Default Current Apple Suppliers Share Insight on What It's Like to Work with Apple


    As the partnership between sapphire manufacturer, GT Advanced Technologies and Apple comes to an end, longtime members of Apple’s supply chain portray the Cupertino California company as a tough but fair partner who offers component manufacturers a chance at success provided they take the proper precautions. Officials from Pegatron along with other unnamed Apple suppliers recently spoke with the folks over at The Wall Street Journal about their relationship with Apple. The key takeaways were that suppliers shouldn’t promise things they cannot deliver and that Apple partners should diversify and make arrangements with other companies.

    Although the concept behind what was said may sound like basic business advice, suppliers believe these factors played a part in the implosion of GTAT, a sapphire manufacturer that partnered with Apple but couldn’t deliver the material as promised. In just less than a year after having signed a contract with Apple, the company ended up filing for bankruptcy.

    The whole issue started with GTAT telling Apple that it would be able to build large sapphire boules sized at 578 pounds, which is double the size of competing products. GTAT at that point struggled to manufacture boules of sapphire at that size, experiencing poor yield rates and producing tons of material that was unusable. According to other suppliers, over promising Apple, which is known for being strict and demanding, is a critical mistake. One person said that suppliers from Japan tend to be conservative in what they tell Apple they can deliver, which stands in contrast to the large promises made by GTAT.

    Despite this, Apple has a reputation for being difficult, with supply chain managers constantly looking to squeeze costs. Many of the managers are said to be former employees and as a result they are extremely familiar with the costs and margins of components while being notoriously tough when it comes to negotiations. Furthermore, Apple’s product cycles are also cyclical, with quick ramp-up of production for new products then shipments to slow down considerably before next year’s newest model. As a result, one unnamed supplier said they might not add capacity at the levels that Apple wants for fear of incurring too great a cost.

    GTAT ended up characterizing its contract with Apple’s as “oppressive and burdensome,” suggesting that Apple tried to squeeze the small supplier into an unmanageable contract to provide scratch-resistant sapphire material. Longtime suppliers who watched the deal with GTAT come and go didn’t portray Apple as being as villainous as GTAT made them out to be.

    It’s always interesting to see the various sides of the story and based on everything that has been revealed and continues to surface, it seems like GTAT is really the one to blame for their misfortunes.

    Source: The Wall Street Journal

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  2. #2
    Livin' the SPIDEY Life SpiderManAPV's Avatar
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    Quite interesting read.

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    Carvensno (2014-11-22)

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    Livin the iPhone Life Carvensno's Avatar
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    Said before, they bit off more than they can chew, and sounds like they promised a double size product they had no knowledge of knowing how to make it. Thus telling Apple a lie and gambling on that promise and failed. I'd say it's GTAT fault for failing.

  5. #4
    Quote Originally Posted by Carvensno View Post
    Said before, they bit off more than they can chew, and sounds like they promised a double size product they had no knowledge of knowing how to make it. Thus telling Apple a lie and gambling on that promise and failed. I'd say it's GTAT fault for failing.
    I agree. That's what it had sounded like to me from the beginning. They couldn't perform to the standards that Apple has, and couldn't deliver what was promised. So, GTAT over estimated and now we as consumers pay the price. Because if they didn't have issues, we'd all be talking about how Apple wowed the industry with sapphire glass screens.

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    Carvensno (2014-11-22)

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