Apple is known to work closely with component suppliers and even invest in their facilities to ensure proper supply for their product lines. Given the fact that Apple releases just one iPad, iPod touch & iPhone model every year, the component control becomes very important for them.
While the challenges of getting components for millions of iPhones and iPads is a challenge, Apple also enjoys a unique economies of scale. Apple negotiates hard with its suppliers to get the best rates, competitors are said to be finding it hard to compete the pricing on MacBook Air and the iPad 2. But just as we finish praising Apple for its component strategies, we are hearing of complaints!
Digitimes reports that suppliers of touch panels for Apple’s iPad 2 are complaining that their margins were squeezed with promise of high volumes but Apple hasn’t delivered on the same. Apple has apparently cut down the orders for iPad 2 touch panels heading into Q4 thus irking the suppliers. Apple seems to have played the ‘bad economy’ card to justify the cut.
According to the report Apple was expected to manufacture as man as 32-34 million iPad 2’s in the second half of the year, but the estimates have dropped since then. Suppliers have of course went on to say that this is a usual tactic by Apple to get better pricing for its components. While all this can never be confirmed by either parties in the open, lets hope that the iPad 3 is coming early, thus justifying the cut in iPad 2 estimates.