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Apple taking over procurement duties at suppliers, report claims

updated 03:17 pm EST, Wed November 20, 2013

Company said to be securing own components

Apple is taking over parts procurement duties from its manufacturing partners, Digitimes claims. The company has reportedly been able to secure better parts through its own sources, cutting out intermediaries and raising profit margins. Taiwan-based manufacturers previously reaped extra income from the procurement process, but Apple has allegedly softened the blow by letting them raise quotes, which could drive their profits up 3 to 5 percent in the near term. In the future, manufacturers also won't have to maintain their own standing parts inventories.

Apple is known to maintain relatively tight controls on supply, often signing long-term deals to ensure it has the parts it needs at a price it wants. If it runs into yield problems, it will add or switch suppliers as necessary to meet pre-planned launch windows. Selecting its own component suppliers may not only offer Apple a price advantage, but still closer control of the supply chain.




by MacNN Staff

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