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Asia Apple

Think Being an Apple Supplier Is a Boon? Not so Fast.

As Apple goes, so go its suppliers—but worse.

Share prices for top companies that make parts for Apple products declined far more than Apple’s own stock did last year, dropping by an average of 23% from the year before when compared with only 5% for Apple shares, according to an analysis by The Information. The same analysis shows Apple has become increasingly reliant on Chinese companies for parts, at a time when it is delicately navigating a trade conflict between the U.S. and China.

Being a consumer-electronics supplier has always been a competitive industry in which the only financial salvation from low margins is high sales volume. Apple, though, has become an extraordinarily big and powerful buyer, especially of high-end components, able to demand much tougher terms than other smartphone companies, according to more than a dozen people close to Apple and its supplier relationships interviewed by The Information. 

What Is The Information?

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'Supplying Apple is kind of a like a drug,' said a former employee of an Apple supplier. 'Once you’re addicted, you can’t quit.'