Since at least 1999 Apple has attempted to implement a dual-sourcing strategy for critical product components. This is arguably easier for a market-leading innovator than a price-sensitive market follower. But it has still been tough. It requires a very disciplined approach to product design, specification, sourcing/procurement, and supply chain management.
According to Timothy Arcuri, an analyst at Cowen & Co. a recent deal between Apple and Intel means the iPhone 7 is fully dual sourced. Mr. Arcuri told the Wall Street Journal, he "expects Intel to supply about half of the baseband chips for iPhone 7 units Apple will sell, or around 40 million by the end of 2016." The other half will be supplied by Qualcomm.
Dual sourcing is fundamental to supply chain resilience. With effective strategic execution it can also generate price advantages.
No comments:
Post a Comment