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Game of Phones: Apple fighting to squeeze iPhone 7 profits

by Jacob Kleinman | July 5, 2016July 5, 2016 6:30 pm PST

Mass production for the iPhone 7 may have already begun, but Apple is apparently still negotiating prices with some of its biggest suppliers. A new report claims the company is pushing for better deals in an effort to maintain high profit margins despite some significant spec upgrades and slowing sales.

DigiTimes claims Apple is playing various camera module and circuit board suppliers against each other to get a better price. The company is also apparently pressuring its manufacturing partners Foxconn and Pegatron for a better deal, and may team up with Taiwan-based competitor Wistron as a result. In response, Apple’s suppliers are apparently looking to increase shipments to other customers to offset the loss.

The iPhone 7 is rumored to offer twice as much storage as its predecessor, starting at 32GB of space with 128GB and 256GB options as well. The iPhone 7 Plus could also pack 3GB of RAM and may even feature a dual-rear camera setup. If Apple wants to offer all those extras without raising its baseline prices or hurting its bottom line, the company will need to cut costs somewhere.

Apple is also suffering from a bit of a dip in iPhone sales as smartphone shipments start to slow around the world. Pushing down component costs should help the company keep its margins even if sales don’t recover when the iPhone 7 launches later this year.

DigiTimes

Jacob Kleinman

Jacob Kleinman has been working as a journalist online and in print since he arrived at Wesleyan University in 2007. After graduating, he took a...

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