Apple Is Gorging Smartphone Parts at the Expense of Its Rivals

Apple’s upcoming iPhone 8 is expected to be a real winner — particularly in regards to its premium specifications, but also because of its anticipated, record-smashing sales performance. And while there’s no doubt most of us are eagerly anticipating the uber-premium handset’s arrival, a fresh report published this morning by the Chinese DigiTimes seeks to shed some light on just how much pressure Apple’s high-demand for components has placed on the majority of Far East supply chains.

While things are looking bright for Cupertino and the fate of its upcoming flagship, the DigiTimes report highlights how Apple’s high-demand for components — including camera modules, SSD flash storage, and high-capacity batteries, for example — has placed its rivals in an awkward position, where they’re literally scrambling to secure sufficient supplies for their own flagship devices.

Specifically, according to a number of Taiwan-based component suppliers cited in the report, Apple has been sucking up the vast amount of available components for its upcoming iPhone 8, which has left many lower-end, Chinese-based Android manufacturers (such as Oppo, Vivo and Xiaomi) facing the potential of severe shortages. Since Apple, of course, isn’t the only company who’s planning a major product launch for the second-half of 2017, these manufacturers have been left in the lurch, as they try to ramp up production and secure their own supplies of any existing components.

“As production for new iPhones is expected to begin in third-quarter 2017 and many Android smartphone vendors will also launch new models in second-half 2017, demand for handset components will increase significantly, which may result in shortages,” DigiTimes said.

In addition to camera sensors, batteries, and SSD flash storage, the report cites that Apple’s high production yields during the third-quarter could even further herniate supplies of other components like fingerprint sensors, metal housings, and components necessary to build LCD/OLED displays. Sources cited, for example, how an increase in the use of 18:9 display panels (such as the ratio of its 5.8-inch OLED display destined for iPhone 8) are also raising concerns among lower-end Android manufacturers.

Adding fuel to the fire for manufacturers other than Apple is the fact that component supplies had already been at relative lows prior to the Cupertino-company swooping in and essentially monopolizing the Far East component supply chains — a reality which was made manifest in recent quarters due to an overall consolidation in component orders, which directly reflects declining device sales in general.

Fortunately, not all hope is lost for the underdogs, however, as many of these lesser-known Chinese entities, according to sources, have been more proactive in their approach to building up component supplies in recent months, and taking the necessary steps to stock their coffers ahead of what’s expected to be yet another blockbuster holiday quarter for Apple’s iPhone.