The Apple empire that swept the world is also going to cut production?
Approaching Christmas, which was supposed to be the peak season for apple shipments, this year is different. According to media reports, Apple is facing a supply chain crisis, with both iPhone and iPad in short supply and delivery times delayed.
During the October stocking cycle, production of iPhones and iPads was suspended due to shortages of parts and chips, the first time in more than a decade that production had been stopped.
This has led to a possible 10 million reduction in iPhone 13 production, with sales of 90 million units reduced to 80 million units this year.
Why is Apple, known as the "supply chain master", also caught in a supply chain crisis; how will hundreds of Chinese manufacturers that rely on Apple respond?
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This supply chain crisis will cost Apple more than $10 billion a year.
Apple CEO Tim Cook once said that due to the impact of the supply chain, Apple lost about $3-4 billion in revenue in April-June this year; it lost about $60 in July-September.
Cook predicts that the impact will be even greater in the fourth quarter, and the annual loss will inevitably be above $10 billion.
The data shows that from September to October this year, the output of the iPhone 13 series has been reduced by 20% compared with the expected target. In order to ensure iPhone 13 shipments, only other product parts can be sacrificed.
At present, the iPad and the old iPhone have been reduced by 50% and 25% respectively, but they still cannot meet the supply of the iPhone 13. According to the official website, the waiting time for iPhone13 series models is 3-5 weeks, which is the longest waiting time for users in recent years.
It is worth noting that the chip that cards Apple's neck is also a chip, and it is a low-cost ordinary chip.
For example, the latest iPhone13 Pro Max has more than 2,000 parts, and the high-end A15 chip specially supplied by TSMC is not lacking, but the common chip is limited.
It is reported that the current shortage of iPhones is Texas Instruments power management chips, Broadcom's connection chips, these components although the price is low, but a wide range of uses, in addition to mobile phones are also used in home appliances and cars.
Since 2020, the global outbreak of a lack of car core crisis, the original 10 yuan chip has been speculated to hundreds of yuan, market speculation has increased the manufacturer's hoarding efforts, the more hoarding, the more lacking, resulting in the delivery cycle was delayed to more than 52 weeks.
In addition, since 2018, Sino-US technology frictions have been intensifying, and the United States has frequently suppressed Chinese technology companies, and has also increased the stocking of Chinese companies, indirectly disrupting the global chip supply chain.
At present, the severe core shortage crisis, even Apple can do nothing, can only continue to put pressure on suppliers.
We said that although Apple's market value is close to $3 trillion, the iPhone has become its hidden worry.
Apple's revenue has always been overly dependent on the iPhone, and its revenue composition currently has five major parts: iPhone, service revenue, MAC, iPad, wearables, household goods and peripheral products.
According to the third quarter report of 2021 released in July, the iPhone revenue reached $39.57 billion, still occupying half of Apple's empire.
Apple's second pillar, "service revenue," is $17.4 billion, accounting for 21.5 percent of revenue, which refers to revenue from the Apple Store and products like iCloud, AppleCare, and Apple Pay, but only if you have an iPhone.
Therefore, 70% of Apple's revenue is contributed by the iPhone.
After 10 years of wild running, smartphones have bid farewell to high growth in 2018, and global sales have been declining in recent years. In a few years, mobile phones will be reduced to a huge but barely growing consumer electronics market like PCs.
In the long run, the iPhone has no super high expectations, if this lack of core crisis leads to a 50% reduction in iPhone production, next year will definitely have a big impact on Apple's performance.
If Apple's performance declines, the first to be damaged may be China's fruit chain suppliers.
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As of 2020, Apple has a total of 98 Chinese suppliers, accounting for 49% of the total, including connectors, acoustics, precision components, camera modules, glass panels, chargers, metal housings and other devices.
Among them, the most famous are Foxconn assembled by the whole machine, Luxun Precision and Goertek shares of OEM wireless headphones.
These foundry giants with a market value of hundreds of billions of dollars have all risen by Apple.
For example, Luxshare Precision's 2020 financial report shows that Apple contributed 63.843 billion yuan in sales to Luxun, accounting for 70% of its total revenue.
This means that once Apple has any turmoil, its performance will be affected.
In April, Apple announced plans to cut AirPods wireless headphone production by 25 to 30 percent as increased competition undermined sales of the company's fastest-growing product line.
Since then, the sales data has also confirmed Apple's reduction in headphone production.
The data shows that Apple's wireless headphone shipments in the second quarter of 2021 were 15.5 million units, down 25.8% year-on-year, and the market share also fell from 38% in the same period of 2020 to 26.5%.
Foundry headphones of Luxun is also naturally affected, its third quarterly report shows that the company achieved revenue of 81.013 billion yuan, up 36.09% year-on-year; net profit attributable to the mother of 4.69 billion yuan, up 0.21% year-on-year.
Among them, in the third quarter, the company's main revenue was 32.866 billion yuan, up 42.42% year-on-year; the net profit attributable to the mother was 1.60 billion yuan, down 25.28% year-on-year.
Moreover, Lixun and Goertek are after all doing low-value-added OEM business and making hard money. According to the third quarterly report, the gross profit margin of Luxun Precision is only 16.11%, and the gross profit margin of Goertek is only 14.77%, which is far lower than Apple's gross profit margin of 41.78%.
Now that the price of various raw materials has risen and it has fallen into a supply chain crisis, Apple is likely to continue to compress the profit margins of suppliers in order to reduce costs, and the gross profit margin of 16% may not be maintained.
It is clear that foundries that are highly dependent on Apple will inevitably lead to a dead end in the future.
In order to break the situation, we must move in the direction of higher added value with higher technical content, such as entering the field of components of popular tracks such as new energy vehicles, photovoltaics, wind power, and energy storage.
In the past 20 years, the West has moved the manufacturing and processing links to the east, we have firmly seized the opportunity, the resources and funds of the entire society have all poured in, and created a strong Chinese manufacturing, like Foxconn, Luxun, Goertek in the Apple industry chain, are the products of this round of economic take-off.
With the intensification of competition among major powers, China's industrial upgrading is imminent, and we are in a transition period from high-speed growth to high-quality growth.
In the future, Chinese enterprises will only face more challenges, only by strengthening independent innovation and improving independent intellectual property rights can we be invincible in the fierce international competition!