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back to article Peak Apple: Yet ANOTHER supplier reports drop in demand

A key Apple supplier has hinted that its revenue from Cupertino has plummeted in recent months. Laird Plc, which makes heat-control components and electromagnetic shielding for use in wireless devices, said revenue from its "largest customer" fell 17 per cent in the first quarter of this year compared to the same period in 2012 …

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Silver badge
Headmaster

This is not surprising. As many commentards here have pointed out............

.............when Cupertino faced serious competition in the high end of the mobile market, life would get more difficult for them. I do not understand why this attracts such amazed headlines - its markets-101. More competition, life gets harder. Does this mean that Apple are suddenly going to stop earning serious money? No, of course not. They have simply begun to lose their market dominance - an entirely natural progression. A development which even the most die-hard iFanboi ought to welcome for reasons that ought to be too obvious to have to explain.

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Anonymous Coward

On the other hand.

Apple could be buying the bits from someone else.

Just a thought.

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FAIL

Re: On the other hand.

Exchange rate fluctuations, cost pressures driving down prices...

I can think of a dozen things that could impact a suppliers turnover while at the same time output has increased.

Still, those things are boring when page-clicks and ad revenue are king eh?

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Anonymous Coward

Re: On the other hand.

I look forward to continuing to read The Registers peak Apple articles for the next few years.

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Silver badge
Boffin

Re: On the other hand.

Or - it could mean that the market is now saturated with a wide variety of products that equal or exceed anything coming out of Cupertino, and at a lower price.

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Boffin

Re: On the other hand.

By 17%? Not a chance. Especially as most Asian exchange rates are pegged to the dollar. And commodity prices have been going one way in the past couple of years (and it ain't down). Also, they said revenue from their largest customer had gone down, not profit. These terms, in accounting parlance, are quite different:

Revenue is how much you've made from a customer. E.G: I sold Apple $500 million worth of stuff

Profit is how much you made from your revenue: E.g. After costs, I made $150 million of profit of my sales to Apple.

They're saying revenue is down, not profit. This means that either Apple has reduced the price they're paying by 17% (don't believe that for a second), they've bought 17% less stuff or some combination of the two.

Also, companies making large purchases in foreign currency fill usually go to a bank and sign an agreement to buy x amount of currency y with currency z at a point in the future (this is called a Forward), so currency fluctuations usually don't affect this kind of thing.

So no, it's not price fluctuations, it's almost certainly that they're buying less stuff.

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Re: On the other hand.

Exchange rates etc don't explain the company actually stating that revenue from their main customer has fallen 17% year on year though, does it.

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Anonymous Coward

Re: On the other hand.

"They're saying revenue is down, not profit. This means that either Apple has reduced the price they're paying by 17% (don't believe that for a second), they've bought 17% less stuff or some combination of the two."

Apple could be paying less, exchange rates could have moved against them, Apple could be buying from another supplier, they could have lost one or more other customers - many, many reasons. But it gets page impressions to blame it on Apple.

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Re: On the other hand.

Or --- since the cited drop was in revenues, not unit shipments, it could refer to "walmartizing" --- the biggest customer has enormous power to put the screws to suppliers, locking them into lower prices every quarter.

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Anonymous Coward

If this were due to Apple (assumption 1) it could be due to them having over-purchased in a previous period, exchange rate movements, Apple using other suppliers for some of the supply, Apple negotiating better prices etc. etc. Perhaps we should focus on what we do know - i.e. that Apple shifted more product than 12 months ago - so if the suppliers are seeing a drop maybe, just maybe it's not all doom and gloom at Apple?

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Silver badge
Paris Hilton

> Apple negotiating better prices etc. etc.

How? By kidnapping the CEO's daughter and threatening to bludgeoning her to death with rounded corners??

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No, the old fashioned way

Simply by saying, "Fine, then. We'll take our custom elsewhere."

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It's about the revenue, stoopid

The key word here is REVENUE; not orders, not units. It's a well known fact that per-unit revenue for mass-produced products reduces hugely as time goes on. Also, the customers (possibly Apple in this case) apply pressure for lower and lower pricing whenever a procurement deal is in the offing. Plus, they may be buying from Laird's competitors.

Talk about trying to find a story where there isn't one! It's like CNN in Boston all again.

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4/4s vs. 5

4/4s with a glass back

5 with an aluminium back

does design impact demand of shielding and heat control components? Hmmmm.....

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FAIL

So it's true...

Apple is finally going down the tubes. Yet I'll still be accused of scaremongering, or compared to Michael Dell. Whatever, keep drinking the Kool-Aid, it'll run out eventually.

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Anonymous Coward

Re: So it's true...

Nah, you'll just be accused of being a bit of a trolling dick. Which is exactly what you are. A bit like the author of the article. What a pathetic little website this has become...

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FAIL

Aging products, a tortuous supply chain, angry suppliers.....

Of course Apple is in trouble. They haven't released anything truly "new" in the last four years.

They've shot themselves in the foot with their only supplier of screens, memory and microprocessors - Samsung won't deal with them directly any more. They've had to source components on the open Asian markets, and have lost their "favoured customer" status with all the component brokerages. Their component prices have multiplied recently (nearly 400% up).

They've even upset their principal manufacturer Foxconn by trying to force down factory prices so Foxconn just changed their lines to making generic PCs for more profit! The prices to Apple ROSE by over 300%....

Their only hope is to carry on their spurious litigation against the whole of the rest of the computing world - they've patented rounded rectangles and multiple touch. They'll just have to buy "friendly" judges as usual and flood the legal system with these bizarre claims. Microsoft will be in trouble over the "touch" content of Windows 8....

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Anonymous Coward

Re: Aging products, a tortuous supply chain, angry suppliers.....

If that is a definition of Apple in trouble - the others (who have just copied Apple) are in even worse shape and face more competition at the lower profit end of the market with near zero loyalty from customers. People may be loyal to Android - not to HTC or Samsung or ??

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Anonymous Coward

Re: Aging products, a tortuous supply chain, angry suppliers.....

[citations needed]

Seriously, did you make this up, or do you have a reference which actually has hard information?

Hmm, thought not.

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