OLED SCREEN: Has Apple not lost it Mojo supply chain? Well, that is what we are about to look at.
While many consumers remember the iPhone for its exceptional design, closed-wall operating system and cut-throat price tag, the industry connoisseurs in Asia turn to the American giant as an example of improbable production discipline.
Firstly checked was under Tim Cook, and now Jeff Williams, the current operations director, Apple has gleamed like a beacon of how to unveil and develop unique materials, coerce and coax suppliers, and to generate millions of units without going in debt to any factory.
For now, everyone has got to hear the ugly tales about delays in the supply chain. But analysts have so far pardoned Apple, with year-round sales forecasts hovering just 1.5% in the past six months.
Taking a stare at its key suppliers reveals a different story. And we humbly say big thanks to Taiwan’s rules requiring the release of monthly sales; we can trace the endemic weakness in its exclusive processor manufacturer, Taiwan Semiconductor Manufacturing Co., and the primary assembler Hon Hai Precision Industry Co.
The manufacturer of camera modules Largan Precision Co. also shows relative weakness.
Investors and Analysts seem to harbor the belief that this is only a minor setback and that things will be alright. But the delay in the production, caused by multiple component bottlenecks, has shown a crack in the armor.
I’m worried it’s not a momentary lapse. The multiple failures in production this year make me wonder if Apple has trouble making decisions at their highest levels.
A series of accumulations along the supply chain goes back to a fundamental choice made many months ago: the pick of organic light-emitting diode (OLED) displays for this year’s iPhone.
As we have known, the benefits of OLED screens are numerous, and I will not attempt them, with competitors including Samsung Electronics Co. already using the new generation screens (OLED).
Has it been a company on the planet that understands the electronics supply chain in detail, want to take a guess? Of course is Apple. The company tends to have its unique in the way its product management teams work closely with component manufacturers to evaluate technology, capacity, and capability. Where deems necessary, Apple even purchases equipment to be deployed at a supplier’s factory to help boost and enhance performance.
Then, when Cupertino decided to give OLED screen a try, he should have known that the supply would be limited and that the company would be relying on the giant opponent Samsung. Maybe Cook and Williams agreed with this and thought that Samsung would increase fast enough to guarantee OLED for everyone, or perhaps they thought alternative providers would come on stream. They were wrong. Apple is wrong from time to time, Scratchgate is a good example, but this error was enormous.
At the beginning of the year, Apple seemed to have grasped the understanding of this miscalculation and decided to split the release to ease the pressure, giving us two products: iPhone 8 (with traditional LCD) and iPhone X (with OLED). And this being what it is, was another mistake. I wrote earlier about the madness of presenting premium versus cheap products at the same point in time, while on the other hand, fellow Gadfly Shira Ovide lately showed that the iPhone 8 seems to be failing in the market and why this is a problem notwithstanding what can happen with the iPhone X.
However, this was only the beginning of what could become the manufacture of Apple annus horribilis.
When it came to OLED, the company is said to be facing a new challenge: to make the fingerprint sensors work through an OLED screen Failed and Apple had to abandon the idea, instead of resorting to facial recognition. It was probably already a feature, but with Touch ID now gone RIP, Face ID was in front and center (Apple could not go back to annoying passwords). That means relying on Romeo and Juliet, the crucial two-part sensor module to make it work. But, once again, Apple miscalculated the supply chain and was left with bottlenecks, as the Wall Street Journal outlined last month.
Not to forget, the whole story began with the decision to go ahead with OLED knowing that the supply was not insured, and it has become the lullaby about an old woman who gulped down a fly.
If this is a single cycle error, then, Apple can return to its former glory. If the problems are the result of arrogance, then it tells me that Apple has lost its mojo.
With rival brands such as Samsung and Huawei becoming more adept at working with vendors, Apple runs the risk of losing its hardware edge at a time when its iOS platform is also under fire. It probably will not be making the same mistake again.
A SWITCH TO OLED SCREEN MIGHT DROWN APPLE IN A BIG MESS