Chip supply or the biggest obstacle to domestic mobile phones catching up with Apple
Recently, some domestic mobile phone brands have expressed that they are facing a shortage of chips, which may lead to some mobile phones being out of stock. In contrast, Apple’s iPhone 13 has achieved sales of 500,000 on a domestic e-commerce platform within two weeks of its launch, and has surpassed domestic mobile phone brands in the global market. The second place, which highlights Apple’s advantages in the supply chain.
Apple’s advantage in the supply chain is indeed something that Chinese mobile phone companies do not have. TSMC, the world’s largest chip foundry, has given Apple a preferential discount but only increased by 3% despite raising the chip foundry price by as little as 10%. It can be seen that TSMC’s preferential treatment of Apple.
The results announced by OFILM, a Chinese mobile phone industry chain company, show that the loss of Apple’s orders has led to a 50% drop in revenue, but a 90% drop in net profit, which proves that Apple’s profit to the supply chain far exceeds that of Chinese mobile phone brands. The lucrative profits of the company have naturally prompted the supply chain to prioritize the supply of components to Apple.
Apple can give huge profits to the supply chain because it occupies most of the profits in the global mobile phone market. According to the data released by the market research agency Counterpoint, Apple’s profit share in the global mobile phone market has increased from about 60% in the same period last year to 75% today. It is because Apple has seized more high-end mobile phone market share, and the reason is that most of the high-end market share that Huawei has given up after the decline of mobile phones has been seized by Apple.
As Apple’s profitability increases, it naturally has the ability to share more profits with the supply chain. In this case, the supply chain will of course be further inclined to Apple. In the current shortage of chip supply, chip companies will give priority to meeting Apple’s needs. .
Since Q3 2020, Chinese mobile phone companies Xiaomi, OPPO, and vivo have increased their share of the global mobile phone market. Among them, Xiaomi ranks third in the multinational global mobile phone market and ranks second in the global mobile phone market. There is a short distance away, it seems that the number one in the global mobile phone market is just around the corner.
However, as the shortage of chip supply becomes more and more prominent, the competition among mobile phone companies has changed from the competitiveness of mobile phone products to the control of the mobile phone industry chain. Chinese mobile phone companies want to capture more market share from the global mobile phone market. It is necessary to ensure the supply of mobile phone components, but the reality is obviously not ideal.
The reason is exactly as mentioned above. Apple owns most of the profits in the global mobile phone market. It can share more profits with the supply chain. The supply chain naturally gives priority to supplying components to Apple, which has become Apple’s competitive advantage in the smartphone market.
Under the cost pressure caused by rising chip prices for Chinese mobile phone brands, Apple has reduced the price of the iPhone 13 by 800 yuan to highlight its advantages in cost control, so it is not surprising that Chinese consumers have been lining up to buy the iPhone 13 recently. In the face of the iPhone 13 sales boom, domestic mobile phone brands can only helplessly lament that it is too difficult.
Apple overtook Chinese mobile phones in just two weeks of iPhone 13 sales in September. There is no doubt that it won the first place in the global mobile phone market in the fourth quarter. The question now is just how much Apple will lead Android mobile phone companies in the fourth quarter. Apple’s control over the industry chain may prompt domestic mobile phone companies to rethink their symbiotic relationship with the industry chain.