Apple, Inc. has been a true innovator, and millions of customers are willing to pay a high premium for the quality, design and features of Apple devices like the iPhone, iPad, iPod and Apple Watch. But Apple doesn't make all of its devices on its own. It procures components from a large number of suppliers, and there are service-vendors responsible for assembling those different components into the final product.

Apple runs one of the most efficient and successful supply-chain management systems. This article takes a look at Apple's top suppliers, and we'll also explore the benefits and drawbacks of this business model, for both Apple and the suppliers. (Note: This list is not exhaustive and is arranged alphabetically. The locations of suppliers listed here are limited to the facilities that supply Apple; suppliers may also have other facilities.)

  1. Analog Devices, Inc. (ADI): NASDAQ-listed ADI is based in Norwood, MA. It provides the capacitive touch screen controllers for the iPhones and the Apple watch. It supplies these components from Ireland, the Philippines, and U.S.-based facilities. There are rumors that ADI will also provide the much anticipated 3-D touch feature in upcoming Apple devices. Such rumors led to ADI stock price shooting up 9.8% over the course of a day, which indicates the impact of Apple’s business on its suppliers' valuations.  
  2. Glu Mobile, Inc. (GLUU): NASDAQ-listed Glu Mobile doesn't supply Apple with hardware but is a major provider of iOS apps and mobile games. Valuewalk reports that “Glu Mobile makes 64% of revenue from Apple,” implying its major dependency on Apple.
  3. Jabil Circuit Inc. (JBL): Jabil’s manufacturing facilities are based in China, and it is listed on the NYSE. It supplies phone casings for Apple. Jabil also makes a wide variety of electronic and manufacturing devices like computer numerical control tools and medical device miniaturization, and it also provides services such as product ideation, design, development and creation. Despite this diversified set of products and service-lines, Jabil reportedly relies on Apple for approximately 20% of its business.
  4. Micron Technology, Inc. (MU): Micron and its subsidiary companies, like Elpida Memory, are based in multiple locations across the U.S., Taiwan, Singapore, China and Japan. They supply various memory modules like DRAM, LPDDR3 and LPDDR2 for Apple devices. These modules are used by smartphones and electronic devices to efficiently multitask and run various applications. The recent iPhone 6 uses LPDDR3, while the company is currently testing the next version LPDDR4, which is expected to be up to 60% faster and low on power consumption.
  5. Murata Manufacturing Co. Ltd.: Murata is based in Kyoto, Japan and supplies to Apple from manufacturing facilities spread across China, Japan, Vietnam, Singapore, and Indonesia. Apple and Samsung are Murata’s top two clients, procuring ceramic capacitors from the company. These electronic parts are used to control the flow of electricity in electronic devices, and, according Reuters, they constitute 40% of Murata’s overall sales towards smartphones and other electronic devices.
  6. Nidec Corp.: The much anticipated Apple Watch comes with a special device called a taptic engine, which produces a sensation of being tapped on the wrist. Japan-based Nidec has emerged as the key supplier of this technology. Nidec was established in 1973 and is a global market leader in smartphone vibration motors. 
  7. Qualcomm, Inc. (QCOM): NASDAQ-listed Qualcomm is the world leader in semiconductor, mobile and telecom products and services. It is known to supply multiple electronic components to Apple, including Envelope Power Tracker, Baseband Processor, Power Management module, and GSM/CDMA Receiver and Transceiver. These are various instruments used in the devices' power management systems and in mobile signaling. However, the most important component that is missing from the Apple’s own A-chip processor is the cellular baseband modem. Qualcomm has filled this important space for Apple devices, offering the needed modem technology.
  8. Samsung: With three different subsidiaries – Samsung Electro-Mechanics Co. Ltd., Samsung Electronics Co. Ltd., and Samsung SDI. Co. Ltd. – which are located in four different countries (South Korea, China, the U.S. and the Philippines), Samsung is one of Apple's major suppliers. It supplies multiple components, including flash memory, which is used for storing data content; the mobile DRAM, used for multi-tasking various applications in devices; and the application processors which are responsible for controlling and keeping the whole device running. Despite being a competitor to Apple in the mobile phones market, Samsung uses its supplier status to reduce its own component manufacturing costs via bulk production.
  9. STMicroelectronics (STM): STM is a Geneva, Switzerland-based electronics and semiconductor multinational company. It supplies a low-powered, three-axis gyroscope and accelerometer to Apple, used to detect the orientation and altitude of a mobile device. Along with Apple, STM’s top clients include BlackBerry, Nokia and Cisco. However, recent reports suggest that all may not be well between STM and Apple. Apple has been sued by a patent troll for allegedly infringing seven STM patents after Apple decided to go with STM’s competitor InvenSense to procure gyroscope and accelerometer parts for the iPhone 6.
  10. Texas Instruments, Inc. (TXN): TI serves Apple through its multiple facilities spread across Taiwan, the U.S., Malaysia, Japan, Mexico, the Philippines, the United Kingdom, Germany and China. In the Apple Watch, TI is expected to provide the current operational amplification system, which in turn, contains 30 different components itself. For iPhones and iPads, it supplies the touchscreen controller, power management chip, and a control device. According to past reports, TI was “said to receive a significant number of orders from Apple,” which generated "thousands of jobs" for this supplier.

Benefits to Apple

Apple is known to maintain one of the best managed supply-chains in the world. Using its large-size and global presence, it is able to demand high quality and impose stricter terms on its suppliers. For example, when taptic engines from a Chinese supplier proved unreliable, Apple swiftly procured them from the Japanese firm Nidec Corp (mentioned earlier). Apple has hundreds of such suppliers willing to abide by the terms Apple sets forth.

And outsourcing its component production and device assembly allows Apple to do what it does best – concentrate on designing great products that offer rich functionality and are easy-to-use.

Benefits to Suppliers

Being associated with a brand like Apple can be a remarkable boon for a supplier firm. Apart from the small novice firms, who may derive much of their business from Apple, even larger companies like Samsung use the relationship to their advantage. As we noted above, Samsung continues to compete with Apple in the mobile phone market, however, large orders from Apple allow Samsung to increase bulk production which reduces manufacturing costs for its own mobile phone components.

Another advantage for suppliers is that Apple has a reputation for innovation. Regardless of how specific products have performed, and despite missteps that have occurred, people expect Apple to come out with something new on a regular basis and eagerly anticipate these products. To a certain extent, this shields Apple suppliers, who will continue to see new demands for their goods and services.

Drawbacks for Suppliers

Failing to please Apple can spell doomsday for a small or medium-sized supplier that relies significantly on the tech giant. It can tarnish the supplier's name and business forever. Quality must be maintained at the highest levels, otherwise Apple can easily move on to a competitor.

The Bottom Line

Apple needs suppliers and suppliers need Apple – it's a streamlined relationship that is often mutually beneficial but not without tension. Suppliers have major exposure to Apple and its overall market performance. Financial reports of these supplier companies are frequently used by analysts to predict the developments and sales projections for Apple products. For a supplier it can be make-or-break: Do it well, experience windfall gains. Fail Apple, and be prepared for the worst.

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