Apple buying, leasing equipment for suppliers to ensure parts for 'iPhone 8'

in iPhone
Apple recently bought production equipment for rigid flexible printed circuit boards (RFPCBs) and is now leasing it to suppliers, hoping to secure a stable flow of parts for this fall's "iPhone 8," according to a report.

The equipment is worth "tens of millions of dollars," The Korea Herald said on Friday. It quoted an ET News source as saying one of three RFPCB suppliers -- a Taiwanese company -- decided to back out of the chain, forcing Apple to assist the two South Korean firms still onboard. Herald sources suggested that the Taiwanese company may have been upset by complicated production, tough quality requirements, and low profits.

Apple is said to be using RFPCBs for the new iPhone's touchscreen panel, but the technology is also reportedly harder to manufacture than regular flexible or rigid circuit boards.

Indeed Apple is allegedly searching for a replacement supplier in Korea. In the meantime the remaining partners, Interflex and Youngpoong Electronics, could split a large chunk of the 100 million RFPCB units Apple is expected to order this year.

The "iPhone 8" should sport an edge-to-edge 5.8-inch OLED screen, with a portion of that being dedicated to a virtual button replacing a physical one. It may also feature technologies like a rear-facing laser.

The product could ship later than usual though, and possibly with some features -- like 3D facial recognition and wireless charging -- offline until a software update. That could only happen though if rumors about the product abandoning Touch ID are false.


  • Reply 1 of 6
    lmasantilmasanti Posts: 84member
    Years ago, Horace Dediu, of's fame, demonstrated that capital expenditures at Apple follows an ‘one year before’ the introduction of new technologies. Also, if I'm not wrong, all of the numerical controlled machines to produce the MacBook's one aluminium piece body belongs to Apple. I think this is ‘Apple as usual.’
  • Reply 2 of 6
    SoliSoli Posts: 10,029member
    1) I feel like Apple has been doing this sort of high-cost equipment investing for component makers for a long time.

    2) I keep seeing OLED mentioned. Of all the rumours, why must is be OLED and not one of the other LED-based display technologies that offer better quality, longer life, and lower power draw?
  • Reply 3 of 6
    wizard69wizard69 Posts: 13,369member
    Nothing odd here.
  • Reply 4 of 6
    Definitely, typical Apple. I certainly remember when Apple bought all those CNC milling machines to make sure they could mill those blocks of aluminum to turn into MacBooks, iPhones, and iPads. It's not a big deal for Apple if they want to ensure production dates are met and quality remains high. Those machines costs were probably recovered within a couple of years.

    Still, the news media treats Apple like Apple doesn't know what it's doing. I find it rather sickening listening to people who disparage a world-class company in that way. I think back to how long it took Boeing to build the Dreamliner and the company was severely criticized for it. Sometimes to make advances, it takes a long time to get things right. The Dreamliner turned out great for Boeing in the end. The pundits are always criticizing companies for trying to do a thorough job. Why do people think that a simple wave of the hand instantly produces top-notch products? So stupid.
    edited July 2017 king editor the grateradarthekatwatto_cobrapscooter63thinkman@chartermi.netsuddenly newtonanton zuykov
  • Reply 5 of 6
    lkrupplkrupp Posts: 8,991member
    My insider source says this report is bogus.
    watto_cobramacxpressanton zuykov
  • Reply 6 of 6
    GeorgeBMacGeorgeBMac Posts: 9,218member
    This is common practice across all industries where a buyer has a vendor supplying custom parts that are unique to that buyer (rather than commodity parts that are sold to multiple buyers).  

    First, the buyer could be going to the vendor to get his unique abilities and expertise even though the vendor does not have the capital to build the required tooling.   And, from the vendor's standpoint, why would he invest his own money to make a product unique to a single customer when that customer could shut him off in heart beat by switching production in house or to another vendor?

    Effective buyer/supplier relationships are partnerships.   Mutually beneficial partnerships.
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