Looking back at the past decade of iPhone suppliers: some made a lot of money, while others lost a lot

According to foreign media reports, Nikkei Asian Review recently published a very interesting article, reviewing the impact of the iPhone on the entire supply chain over the past decade. Some companies became very rich because of the iPhone, some companies suffered huge losses, and even a major supplier ended up going bankrupt.

When it comes to Apple's suppliers, the first thing that comes to mind is Foxconn. Yes, Foxconn has grown stronger because of Apple, but it is not the only example of success because of the iPhone.

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In 2006, Hon Hai Precision Industry Co., Ltd. played a major role in a consumer electronics industry that was about to undergo a major transformation, although no one at the Taiwanese company knew what was going to happen.

Over the next decade, the iPhone boosted Foxconn’s annual revenue from $38 billion to $145 billion and made it one of the world’s largest companies by number of employees.

It can be said that the iPhone has reshaped the landscape of Asia's technology industry. Lens supplier Largan Precision's annual revenue has increased by 700%, making it one of the most popular companies in Taiwan. Display glass supplier Lens Technology's market value has doubled, chip supplier TSMC's net profit has tripled, and speaker supplier AAC Technologies' revenue has increased by 600%.

But not everyone benefits from the iPhone. Some companies have been greatly negatively affected by the iPhone.

Apple has integrated multiple functions into the iPhone, including cameras, music players, and games, which has had a great impact on professional companies that specialize in manufacturing these types of products. Traditional Japanese electronics companies including Sony, Nintendo, Toshiba, Canon, and Nikon have all been affected to varying degrees, with only Sony now being the supplier of camera sensors for the iPhone.

There were also people who, although they won large orders from Apple, not only did not get rich, but even fell into crisis and eventually went bankrupt.

Before Apple gave up using Wintek's technology, the company was the main touch screen supplier in Taiwan, but the company filed for bankruptcy in 2014. Wintek once had an annual revenue of more than NT$100 billion (about US$3.3 billion), but because Apple switched to using thinner In-Cell display technology in its products, Wintek could not keep up with Apple and was eventually forced to lay off 40,000 employees. It was eventually delisted in 2015, and more than 1,700 suppliers of Wintek were also directly affected.

Just like the Imagination Tech fallout, if Apple suddenly changes its strategy, many businesses and technologies could even disappear overnight.

"Becoming an Apple supplier means investing a lot of money, technology and new equipment, but you don't know whether these investments can be used on other customers. If Apple abandons your technology or chooses to cooperate with competitors, it will be a fatal blow," said IDC analyst Sean Kao.

Some suppliers are already worried about the future of the smartphone business. It is expected that by 2021, the global smartphone market growth rate will shrink to between 3% and 4%, and the potential of the entire market will become smaller and smaller.

"The entire industry will change, and we won't be in the era of smartphones forever," said Dong Zixian, chairman of Pegatron Corporation. "Smartphones have experienced a great boom in the past decade, but people keep asking me whether smartphones will begin to decline in the future like laptops."

It is very interesting that under the leadership of the new CEO Cook, the number of Apple suppliers has doubled. However, considering Cook's ability and reputation in supply chain management, this result is not surprising. Because the more suppliers you choose for a certain part, the more efficient and reliable the entire supply chain will be.