Yuanbin Du
Over the past few months, Apple has been asking contractors to reduce cost of hardware for production of next-gen smartphones. At that, volume of orders for production of new iPhone 7 is 30% less compared to iPhone 6s in the past year.
Apple partners, of course, are not happy with such a turn of events, as this will significantly affect revenues in the second half of the year. The situation is exacerbated by large number of flagship smartphones that competitors offer at lower prices.
In the past two weeks, China Telecom Corp. operator began selling iPhone 6s without a contract for 4,288 yuan ($ 642), which is less than the official price of 5,288 yuan, said Apple's Chinese website. Competing operators China Mobile Ltd. and China Unicom Corp. also announced discounts on Apple’s products.
Operators often hold clear-outs before release of new models of smart phones. Yet, it is nearly impossible to see price for imported products lower than that on the American market. By the way, price of iPhone 6s 16 GB without a contract is $ 649 on the domestic market.
In the third fiscal quarter, weak sales pulled Apple’s profit down by 27% in the annual comparison. Decrease in performance was especially noticeable in such an important market as China. Apple’s main competitor, Samsung, considered the second quarter the most successful in the last 2 years.
Sources of the WSJ told that the US company has been negotiating discounts on hardware since January this year. Supposedly, some vendors have made concessions, which subsequently allowed Apple to work out better than expected. Gross margin was 38% on a par with projected 37.5% - 38%.
Analysts said discounts on hardware are likely to have a positive impact on Apple's revenue. On the contrary, the very same discounts will force big companies like Foxconn Technology Group, Catcher Technology Co (produces cases of smartphones), Advanced Semiconductor Engineering Inc. (chip maker) to revise their forecasts for profit. It is reported that Apple has made inquiries about discounts to all suppliers, except for TSMC and Largan, which are one-of-a-kind.
Previously, Fortune reported that, according to assumptions of some of the leading industry analysts, Apple in the near future may start to order production of A-series processors (used in iPhone & iPad) at the Intel company, since the latter has recently made a major step in development of ARM-technology.
Intel has already produced mobile processors. The manufacturer offered the hardware to a variety of OEM-manufacturers, but this option was limited by the company's desire to make processors only with self-engineered architecture. Nevertheless, Intel recently announced that it would also begin to manufacture ARM-processors. This will allow the company to reach a competitive level with manufacturers such as TSMC and Samsung, - the main suppliers of processors for Apple’s smartphones and tablets.
source: wsj.com
Apple partners, of course, are not happy with such a turn of events, as this will significantly affect revenues in the second half of the year. The situation is exacerbated by large number of flagship smartphones that competitors offer at lower prices.
In the past two weeks, China Telecom Corp. operator began selling iPhone 6s without a contract for 4,288 yuan ($ 642), which is less than the official price of 5,288 yuan, said Apple's Chinese website. Competing operators China Mobile Ltd. and China Unicom Corp. also announced discounts on Apple’s products.
Operators often hold clear-outs before release of new models of smart phones. Yet, it is nearly impossible to see price for imported products lower than that on the American market. By the way, price of iPhone 6s 16 GB without a contract is $ 649 on the domestic market.
In the third fiscal quarter, weak sales pulled Apple’s profit down by 27% in the annual comparison. Decrease in performance was especially noticeable in such an important market as China. Apple’s main competitor, Samsung, considered the second quarter the most successful in the last 2 years.
Sources of the WSJ told that the US company has been negotiating discounts on hardware since January this year. Supposedly, some vendors have made concessions, which subsequently allowed Apple to work out better than expected. Gross margin was 38% on a par with projected 37.5% - 38%.
Analysts said discounts on hardware are likely to have a positive impact on Apple's revenue. On the contrary, the very same discounts will force big companies like Foxconn Technology Group, Catcher Technology Co (produces cases of smartphones), Advanced Semiconductor Engineering Inc. (chip maker) to revise their forecasts for profit. It is reported that Apple has made inquiries about discounts to all suppliers, except for TSMC and Largan, which are one-of-a-kind.
Previously, Fortune reported that, according to assumptions of some of the leading industry analysts, Apple in the near future may start to order production of A-series processors (used in iPhone & iPad) at the Intel company, since the latter has recently made a major step in development of ARM-technology.
Intel has already produced mobile processors. The manufacturer offered the hardware to a variety of OEM-manufacturers, but this option was limited by the company's desire to make processors only with self-engineered architecture. Nevertheless, Intel recently announced that it would also begin to manufacture ARM-processors. This will allow the company to reach a competitive level with manufacturers such as TSMC and Samsung, - the main suppliers of processors for Apple’s smartphones and tablets.
source: wsj.com