Apple's Long-time Suppliers Speak on What It's Like to Work with Apple

[RaduTyrsina]

To land a contract with Apple is perhaps the dream of any supplier in the world. But to get the deal is one thing and to see it through is another one. An interesting new article from The Wall Street Journal has current Apple suppliers speak about how is it to work with Apple.

The recent partnership between sapphire manufacturer, GT Advanced Technologies and Apple, has recently come to an end, and with this occasion, longtime members of Apple’s supply chain have had some interesting things to share.

What most of them seem to agree on is that Apple is a ough but fair partner who offers component manufacturers a chance at success provided they take the proper precautions. The main advice that the companies shared is that suppliers shouldn’t promise things they cannot deliver. Apple's current suppliers believe that this was the reason why the sapphire manufacturer that partnered with Apple couldn’t deliver the material as promised.

Here are some more details about how GTAT failed to deliver the material:

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.

Suppliers also said that over promising Apple, a company known for being strict and demanding, is a 'critical mistake'. For example, suppliers from Japan, are said to be conservative in what they tell Apple they can deliver, which is in big contrast to the large promises made by GTAT.

Apple's reputation for being difficult is fueled by the fact that supply chain managers are constantly looking to squeeze costs. Here are some more details:

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,” but longtime suppliers who watched the deal with GTAT cddn’t portray Apple as being as being that villainous.

So, it seems that if you want to work with Apple, you need to make sure that you are up to such a hard task.

Source: WSJ

 

[s2mikey]

It'd be nice to see more suppliers based here in the USA though. That's the frustrating part. Oh well.