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Apple may secure its own battery materials to avoid shortages
Cobalt is an essential component in lithium ion batteries, making it a crucial material in the production of smart devices and electric vehicles. But, as battery-hungry cars go mainstream, there's a risk that the world's supply will be eaten up by cars, which poses a problem for all of the other things we use. It's why Apple has reportedly entered into direct talks with cobalt miners in the hope of securing a supply of the material itself. Bloomberg reports that the company, which has previously left the effort to its battery manufacturers, has now taken a more active role.
Technology is failing to create transparent supply chains
During the early days of globalization, it was relatively easy for corporations to either hide, or be ignorant of, human rights and environmental atrocities committed along their supply chain. Factories and producers were shifting manufacturing or sourcing of raw materials to an increasingly complex network of suppliers, but there was no incentive to look into how a supplier produced, for example, raw cotton or shoe soles. As long as the price was cheap and the quality was good, companies saw little need to ask further questions. That changed, though, in the early '90s, when nonprofits and journalists began to undercover vast labor and environmental issues connected to suppliers of large corporations, shining a spotlight on the dark side of the global consumer market. This led to the development of an array of supply chain technologies -- RFIDs, remote sensing, satellite monitoring, even blockchain-based tools. Many were marketed as solutions, aimed at making it easier to monitor and respond to human rights and environmental violations along supply chains. The results, however, have been mixed.
Apple tries to clamp down on leaks with mixed success
For the longest time, Apple product leaks tended to come from the supply chain: a factory worker would send parts or a design file to accessory makers eager to get a head start on their next iPhone cases. You might want to rethink that assumption. In a leaked secrecy briefing (ironic, we know) obtained by The Outline, Apple's David Rice revealed that leaks from the company's campuses were more common in 2016 than those from suppliers. This is more a reflection of Apple's success clamping down on third-party leaks than loose lips in Cupertino, although it does indicate that the tech giant will turn its attention inward.
Huawei blames slower P10s on memory shortage
Memory speed isn't always something that one would pay attention to when buying a smartphone, or at least you'd expect the latest flagships to come with the fastest options available at the time, but it turns out that this isn't necessarily true. Recently, some Huawei P10 and P10 Plus users in China noticed that they were only getting eMMC 5.1 memory speeds on their devices. For instance, the sequential read speeds were in the ballpark of 250MB/s on AndroBench, whereas the luckier folks who got UFS 2.0 or 2.1 chips on their phones managed to hit around 550MB/s or even 750MB/s (our very own international unit got 786.67MB/s). Indeed, Huawei never specified the type of flash memory on its P10 spec sheets, which led to speculations that the mobile giant was intentionally misleading consumers.
Keeping an eye on working conditions across Apple's vast supply chain is no easy task
Bloomberg Businessweek yesterday posted a gripping tale detailing the inherent challenges faced by Apple as it tries to promote fair working conditions across its supply chain. The Bloomberg piece zeroes in on life at Flextronics in the weeks preceding Apple's iPhone 5 launch. Based out of Singapore, Flextronics was tasked with manufacturing the iPhone 5's camera before shipping them off to China. With factories spread out across the globe, it used its factory space in Kuala Lumpur, Malaysia to handle iPhone 5 camera production. What follows is a fascinating tale detailing how Flextronics tapped into an extensive network of recruiters to amass a workforce large enough to handle Apple's massive product orders. Massive is a bit of an understatement as Apple ended up selling the iPhone at a rate of 3.7 million units a week for several months after the launch. Some of the workers hired to meet these product demands came from as far away as Nepal. And that's where the story really begins. What ensued, according to Taparia and the others, was a frenzy. Even the Nepalese government official in charge of approving foreign-worker permits, Surya Bhandari, says he was deluged with calls from Malaysia and Nepal urging him to issue permits faster and to waive a mandated seven-day waiting period. "They pressured me," recalls Bhandari, now retired. They also told him the men were needed to work on iPhones and that sending men to work for Apple would be good for Nepal. The hunt reached then-27-year-old Bibek Dhong on his mobile phone, while he was packing milk crates at a Kathmandu dairy to support his wife, a newborn daughter, and his extended family. The call would change his life. The article recounts how workers like Dhong are often put into positions where they feel forced, or perhaps strongly compelled, to take out loans for commission payments to a hierarchy of recruiters, who provide access to these coveted manufacturing jobs. What's worse, some employees aren't always able to go back to their home countries on account of intra-country politics and bureaucracies. That's just the briefest of recaps -- the entire article is well worth checking out as it helps color the massive manufacturing machine that is Apple. The article is by no means a referendum against Apple. Indeed, Apple has taken more action than most other tech companies to ensure worker abuse is curtailed as much as possible. Still, the article highlights the daunting challenges involved when overseeing a complex supply chain that spans continents and encompasses thousands of workers.
Reuters sources predict shortage for unannounced iPad mini with Retina display
It's little more than a rumor at this point, but stories of delays and shortages have been circulating for about as long as mentions of an iPad mini with Retina display. Reuters spent the morning adding a bit more fuel to that proverbial fire with its own band of anonymous sources. The "people who work in the company's supply chain" confirmed that there have been issues bringing a higher res tablet to market -- issues that may, in fact, impede Cupertino's ability to capitalize on the ever-important holiday push. The refreshed mini is still apparently set for an October release according to the aforementioned unnamed informants, but it "could be available in only limited quantities this year." As to what's actually causing said shortage, no can say for sure, though word is that Apple's own certification process around power consumption may have thrown a wrench in the proceedings.
The logistics behind transporting millions of iPhones from China to stores worldwide
Apple yesterday announced that its fleet of next-gen iPhones will hit store shelves on September 20. For most people, this means that they simply have to lace up their shoes and head on over to their local Apple retail store pick one up. For Apple, it means that they have nine days to ensure that millions of iPhones emanating from China will ready for purchase at storefronts worldwide. It's a logistical exercise on the grandest of scales, especially considering that Apple routinely sells millions of new devices during launch weekend. Bloomberg today published an fascinating article detailing the innumerable procedures that make up this incredibly complex operation that, when all goes according to plan, stays hidden from public view. The process starts in China, where pallets of iPhones are moved from factories in unmarked containers accompanied by a security detail. The containers are then loaded onto trucks and shipped via pre-bought airfreight space, including on old Russian military transports. The journey ends in stores where the world's biggest technology company makes constant adjustments based on demand, said people who have worked on Apple's logistics and asked not to be identified because the process is secret. The report relays that many of Apple's current practices were "built up" under the watchful eye of Tim Cook who for many years served as Apple's COO and dutifully implemented measures to make Apple the smooth and efficient machine it is today. As for shipping iPhones worldwide, Apple actually begins that process before they are unveiled to the public, moving large shipments of iPhones to distribution centers around the world. Naturally, these shipments are steadily monitored by security guards at all times, "from truck depots, airports, customs and storage warehouses until the product is finally unveiled." While shipping finished products across the globe is one thing, there's another aspect to the logistics machine that isn't often discussed, namely getting all of a device's components together so that the assembly process can begin. The logistics for a new gadget start months before it is unveiled, said the people with knowledge of the process. Apple first coordinates flights and trucks to move components from suppliers to assembly plants in China. Teams from sales, marketing, operations and finance collaborate to forecast how many devices the company expects to sell, said the people. When it comes to shipping iPhones to the US, Bloomberg reports that Apple employs FedEx to carry its precious cargo from China to Memphis, Tenn., where the company is headquartered. As a point of interest, the Boeing 777s FedEx uses cost "about US$242,000 to charter" and can accommodate 450,000 iPhones. The entire article is worth reading as it provides some fascinating insights into the grandiose, and yet silent, mechanisms that enable Apple to operate so efficiently. Whether it's tweaking internal forecasts regarding how many iPhones need to be produced or adjusting the allocation of handsets based on regional fluctuations in demand, Apple stays atop of even the most minute details to keep things running smoothly.
Apple creates academic advisory board to oversee its Supplier Responsibility program
As part of Apple's ongoing efforts to improve labor practices in its supply chain, the company recently formed an academic advisory board to oversee its Supplier Responsibility program. The academic advisory board, which is an all-volunteer group, will be comprised of eight professors from renowned US universities and chaired by Brown University Professor Richard Locke. The Watson Institute reports that the advisory board will make recommendations about Apple's current practices and commission new research with the intent of improving labor practices and working conditions not just in regards to Apple but across the board. Locke hopes that the board will shape the practices of Apple and its suppliers so that the millions of employees involved in Apple's supply chain work under safe and fair conditions, in which "they are paid living wages, work within the legal work hour regimes, [and] work in environments that are safe and where they can express their rights as citizens. While Apple has taken a lot of heat in the media over its labor practices, the company, especially with Tim Cook at the helm, now appears to be a lot more focused and transparent about its efforts to improve the working conditions of the folks who manufacture its products.
Pegatron reportedly nabs 50 to 60 percent of iPad mini orders, breaks up Foxconn's monopoly
While folks are waiting for their precious new iPhones to arrive on their doorsteps, word has it that the leaky iPad mini has unsurprisingly entered mass production, but with a twist. According to today's front page news on Taiwan's Economic Daily News, reports from two local securities firms claim that Pegatron's managed to nab a staggering 50 to 60 percent of iPad mini orders from Apple, meaning Foxconn is finally no longer the sole assembler of iPads. Together (plus component suppliers Foxlink, AUO, TPK and others), both companies will apparently be able to churn out up to 5 million iPad minis monthly. Then there's the iPhone 5 as well: the paper says at least 53 million units are expected to be shipped this year, therefore Apple's adding Pegatron to the assembling front line as early as Q4 in order to maintain a steady supply of products. Obviously we can't use this information alone to deduce whether Apple is moving away from Foxconn, but as long as people get their iDevices then it's all dandy.
Sony postpones Nasne NAS due to quality control issues
Due to a quality control hiccup just one day before the Nasne was due for release in Japan, Sony has been forced to postpone it. The product combines a networked recorder with 500GB of storage and can be used to stream TV and other media to a range of Sony devices including the PS3, Vita, VAIO, Tablet and Xperia phone ranges -- potentially becoming a key example of Kaz Hirai's "One Sony" strategy. Judging from the official explanation of the problem, it sounds like some goods were simply damaged while being transported and hence the delay shouldn't last long.
Gartner: Apple turns over inventory every five days
Technology research firm Gartner is always coming up with innovative ways to compare companies and publish their relative ranks in terms of one criteria or another. Last week, Gartner published the results of its 2012 Supply Chain Top 25, and Apple was at the top of the list. On a scale of 1 to 10, Apple pulled in a composite score of 9.69, about 80 percent higher than second-place company Amazon and a full 436 percent higher than #24 HP. That score is based on a number of factors, including the opinion of corporate peers and Gartner analysts, the weighted three-year return on assets, and inventory turns. That last figure is a measure of how quickly a company can turn over its inventory. For Apple, that number comes out to 74.1 times per year -- essentially once about every five days. The only company that bests Apple in inventory turns is McDonalds, not surprising when you consider that the company has to work with perishable food items. Apple's inventory turn figure indicates that every item in your local Apple Store, for example, stays there no longer than about five days before being sold. Why is this number important? By reducing inventory holding costs and moving product more quickly from manufacturing to consumers, Apple is able to keep costs low and margins high, all of which contributes directly to the bottom line. [via The Atlantic]
China Times: HTC wants to develop its own processors for low-end phones
Encroaching into the semiconductor business might not seem the most obvious move for a phone manufacturer that's trying to unify its efforts. Nevertheless, China Times reports that HTC has signed a "memorandum of cooperation" with ST-Ericsson to co-develop a new dedicated chip for low-end handsets coming out next year. Since ST-Ericsson is a fabless chip designer, HTC won't risk getting silicon between its fingernails. Instead, if this agreement is what it seems, the Taiwanese manufacturer may simply want more direct control over its supply chains and to reduce its current reliance on ready-made designs from Qualcomm or NVIDIA. After all, it can't be easy for HTC's new CFO, looking on while others gobble up those margins.
Apple to create 500 jobs in Cork, Ireland
Apple announced today that it will expand its headquarters in Cork, Ireland. "Apple has been in Cork for over 30 years and we are thrilled to be expanding our presence there," an Apple spokesman told the Irish Times. "Our plans will add over 500 new jobs to support our growing business across Europe." The Cupertino Company is meeting with local officials, the IDA Ireland and the Minister for Jobs Richard Burton who says this expansion "is a huge boost for the country." Apple's current plant in Cork was opened in 1980 and was the first non-US headquarters for the company. The Holyhill location now employs 2,800 people who work in backend, supply chain and distribution operations for Europe.
Report suggests Apple had best November ever
If you think Apple's finances have been flying high in 2011, just wait. A report by Brian White of Ticonderoga Securities shows that the company's supply chain is showing record sales for November. In turn, that could indicate record sales for Apple products during the holiday season. As reported on AppleInsider, White watches the "Apple Barometer," an index of Taiwanese suppliers who make the components for Apple's products. Over the last six years, the barometer has shown an average two percent month over month growth. The numbers for November were huge, with supply chain sales up a full 17 percent over those for October. The October numbers were a bit lower than usual due to Apple ordering many Macs, iPad 2s, and iPhone 4S units during the previous quarter, and that was reflected in the lower Apple stock prices seen in November. In the last quarterly earnings conference call, Apple CFO Peter Oppenheimer told analysts that he expected Apple to set new company records for iPhone and iPad sales during the December quarter. The Apple Barometer numbers seem to indicate that Oppenheimer's forecast was right on the money, and Apple's stock should move higher as a result.
Exploring Apple's supply chain secrets
One of the unsung heroes in the success of Apple over the past ten years or so has been the ability for the company to take control of manufacturing, procurement, and logistics of its products in ways that are completely innovative. In a Bloomberg Businessweek post yesterday, writers Adam Satariano and Peter Burrows did a deep dive into what makes Apple so successful in terms of operations -- an area where Apple CEO Tim Cook excels. According to the article, Apple has "built a closed ecosystem where it exerts control over nearly every piece of the supply chain, from design to retail store. Because of its volume -- and occasional ruthlessness -- Apple gets big discounts on parts, manufacturing capacity, and air freight." The supply-chain management success story apparently began when Steve Jobs returned to Apple in 1997. At that time, most computer manufacturers shipped their products by sea, which was much less expensive but also slower. Jobs wanted to ensure that the translucent blue iMacs that had just been introduced would be available for Christmas 1998, so he had the company pay $50 million to buy up all available holiday air freight space. Companies such as Compaq later tried to book air transport for holiday shipments, only to find that Apple had monopolized the space. Apple's ability to manufacture a product and ship it right to a customer's door began with the iPod era, and an ex-Hewlett Packard exec recalls that an HP staffer bought one and received it a few days later, watching its progress from factory to home on Apple's website. Mike Fawkes, who was the supply-chain chief at HP, recalls that "it was an 'Oh s---' moment." By doing this, Apple was able to avoid keeping large inventories of product on hand Apple also buys up speciality equipment, including customized lasers that are used to poke the almost-invisible holes that are used to emit a green dot of light on many of the company's products, including the MacBook Pro and MacBook Air, as well as the Wireless Keyboard and Magic Trackpad. Those machines cost about $250,000 each, and Apple has bought literally hundreds of them to add a touch to its products that few people may notice. The Bloomberg Businessweek article is a good read, and fascinating for anyone who has an interest in what goes on behind the scenes at Apple.
Sony Ericsson posts surprising Q2 loss, blames Japanese earthquake
Many analysts and market watchers were expecting a strong Q2 earnings report from Sony Ericsson today, but the company took them by surprise, posting a net loss of some €50 million (about $70.5 million), compared with a net gain of €12 million (around $17 million) at the same time last year. The manufacturer also sold only 7.6 million phones during the quarter, marking a 31 percent year-on-year decrease, while overall revenue fell from €1.76 billion (about $2.5 billion) last year to €1.19 billion (almost $1.7 billion) during Q2 2011. CEO Bert Nordberg attributed much of the decline to the Japanese earthquake, which disrupted the venture's supply chain, resulting in the loss of around 1.5 million devices. The report comes after Sony Ericsson launched a widespread cost-cutting campaign and re-focused its efforts on smartphone production, which comprised more than 70 percent of all sales during Q2, compared with just 40 percent at the end of last year. For a more thorough breakdown, head past the break for the full press release.
Analyst ups AAPL on strong projected iPad, iPhone sales
Canaccord Genuity analyst T. Michael Walkley remains bullish on Apple pointing to strong iPhone and iPad sales in June. He's so confident in Apple that he boosted his iPhone sales estimate from 75.5 million million to 77.3 million in 2011. He also predicts Apple will sell a whopping 100.2 million iPhones and 55.1 million iPads in 2012. As others have said before him, Walkley notes that Apple will continue to lead both the tablet and smartphone market. So what does these numbers mean for the average joe? More iPhones and iPads in circulation, greater incentive for developers to jump into the iOS ecosystem and extra cash for Apple to pump into research and development for the next generation iOS devices. Sounds good, doesn't it?
Apple keeping iPhone 5 suppliers mum about launch date
In a research note, Analyst Brian White with Ticonderoga Securities suggests Apple is being extra secretive with its Asian suppliers when ordering parts for the iPhone 5 and is still quietly preparing the next generation handset for a June or July launch. White writes, "Although we do not have a smoking gun that definitively rules out a delayed autumn unveiling or one that supports a launch this summer, there is a pattern of activity in motion with the supply chain that makes us question a delayed launch." Circulating rumors suggest Apple may release the iPhone 5 in the fall instead of the summer as it has done in the past. Analysts making this prediction have pointed to a lack of component orders for the iPhone which should have been made if the Cupertino company was targeting a June launch. Other rumors point to a significant overhaul of iOS which may include a cloud-based file locker and music streaming service that could debut this fall along with new iPhone and iPod touch hardware. White also confirms other reports that suggest Apple is using its cash reserve to secure components for its iPad 2, iPhone and iPod touch. Apple is reportedly offering upfront cash payments to suppliers to keep its production line flowing while blocking out competitors that are not as cash-rich as Apple.
Sony Ericsson Xperia Neo delayed to Q3, Arc and Play facing limited supply due to Japanese quake
There hasn't been much good news coming out of Japan lately and this sadly keeps up with the unhappy trend. Sony Ericsson has officially bumped the broad launch (it's already available in limited quantities) of its Xperia Neo handset to at least July, explaining the delay as the result of "supply chain disruptions." Additionally, the Xperia Arc and Play devices, two other members of the company's new Android Gingerbread family, will be available in smaller volume than expected, at least for the near term. We guess that might go some way to explaining why the Xperia Play failed to reach some UK carriers in time for its April 1st launch date. Skip past the break for a statement from Sony Ericsson, who promises to be more explicit about the situation when it delivers its latest quarterly results on April 19th.
Apple's touch panel demand helped delay RIMs PlayBook
RIM announced its PlayBook tablet last year, and eager BlackBerry fans have been waiting months for this QNX-based tablet to debut. According to a rumor from Digitimes, this wait was made even longer thanks to Apple and its stranglehold on the touch panel market. Asian supply chain sources suggest Apple used its treasure chest of cash to secure touch panels for its iOS devices, leaving other manufacturers out in the cold. RIM reportedly delayed the PlayBook while it secured touch panels and put the finishing touches on its tablet OS. Digitimes is notoriously hit or miss with its insider information, but in this case, its report may be accurate. Apple is known for its ability to secure critical device components from Asian suppliers before its competition. A few years ago Apple cornered the market on NAND Flash for its iPhone and iPods while other manufacturers were left scrambling for the scraps.
