Times are tough, even for the companies like Apple. Reportedly Apple is asking its supplier components for further 10 percent
discount. We are pretty sure Apple is already getting quite a few bargains, thanks to its formidable standing in the market, but since when enough has become enough for Apple. So, the Cupertino company is going to make full use of its clout and is going to wring out extra 10 percent discount from its suppliers.
Given the company's standing, Apple is sure going to get what it has asked for. But we wonder, how the suppliers are going to adjust to 10 percent cut. By reducing the quality of the products? With Apple's stress on quality, we do not think this is ever going to happen. The other way would be to cut the costs in other areas, like employee salaries and benefits, may be. Yea right, that's the easy way out. In this case, we just have to wait for some time to see how many companies then meet the record set by Foxconn.
But exactly what is the reason behind this latest demand? Is company's financial situation iffy? Oh well, if we look at the news circulating last week, then it would be difficult to bypass the ones about Apple's fortunes. Reportedly the company's has enough cash to buy the entire mobile sector barring Samsung and LG. Yes, you read it right. The company is expected to close its third fiscal quarter with a massive cash pile of $70 billion. How much is $70 billion? In simple words, Nokia, RIM, HTC and Motorola Mobility, the four companies commanding 75 percent of mobile industry have combined net worth of only $66 billion.
So, Apple can just swoop in there, buy these four companies in cash and control virtually the entire mobile spectrum. However, it is just a theoretical shots and very many different factors come into play when a company makes a bid for major sector players. But at least it shows that Apple is in the least need of 10 percent of discount. While we appreciate the business acumen of Apple founder and understand that a company needs to cut corners wherever possible. But the biggest question is that would OEMs be able to yield to Apple's demand without putting themselves in a significant risk.
2 thoughts on “Apple Has Enough Cash to Bag Entire Mobile Industry but Asks Suppliers For 10 Percent Discount”
True and not true. Apple have asked for a 10% discount but for the parts for the iPad3 as they have just increased the number that they decided to make due to increased projected figures. That’s the law of bulk buying, the more you buy, the cheaper each unit becomes.
It’s not all roses for Apple though as although they then have cheaper components, they have more stock which they might have problems selling…. AHAhahahaha, nah, I don’t believe that either.