Technology

Which Apple Suppliers Are Most at Risk From a Failed iPhone Launch?

24/7 Wall St. Staff

Published: March 4, 2016 12:55 pm

Last Updated: January 13, 2020 12:21 pm

A quick look at Apple Inc.’s (NASDAQ: AAPL) 2015 supplier list shows that the vast majority of its widely revered supply chain is based out of Asia. China, Japan, Taiwan and Vietnam all feature heavily on the list. There are a comparably small number of U.S.-based suppliers.

Location aside, there’s one thing the lion’s share of these companies have in common: they rely heavily on the success of Apple’s flagship products. A launch flop could quickly translate to some downside in the publicly traded elements of Apple’s supply chain, so with a rumored fresh iPhone launch slated for the end of March, here’s a look at those set to suffer the most if such a flop were to happen.

Sony

Under the leadership of CEO Kazuo Hirai, Sony Corp. (NYSE: SNE) has shifted its focus from consumer hardware producer to parts manufacturer. One of its leading departments, its imaging department specifically, produces the lens that Apple has used in its iPhones and iPads for the past three generations of gadgets.

In the newest models spurred by the growing trend of selfies, iPhones use two of Sony’s lenses. The Wall St Journal claims the company makes as much as $20 on each iPhone 6. With over 13 million of the devices sold on launch weekend alone, the payout for Sony on a successful launch quickly adds up. Of course, the downside is just as great if the launch flops.

Samsung

Many people aren’t aware of the fact that Samsung Electronics provides Apple with a large number of components for both its phone and tablet ranges. Yes, the two companies are fierce competitors in the sale to consumer side of the mobile market, but on the supply and manufacture side, they are very much partners.

Past reports suggested that Samsung provided Apple with as much as 40% of the processors Apple uses to make its iPhones, and more recent estimates put this figure at 75%. Whatever the figure, there’s no question Samsung is positioned to gain from a successful iPhone launch from a supplier perspective, at least, and just as with Sony, is equally exposed to a failure.

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