Specialist
Former manager at Goertek Inc
Agenda
- Apple’s (NASDAQ: AAPL) cooperation model and management strategy with Chinese component suppliers, plus supply chain qualification requirements and product indicators
- Goertek’s (SHE: 002241) order cut by Apple – possible reasons, plus Apple’s supply chain cooperation adjustment probability with Goertek and Luxshare (SHE: 002475)
- Chinese Apple supply chain manufacturers’s dependence on Apple, plus main advantages and disadvantages of being Apple’s supplier
- Apple industry chain relocation outlook, plus upstream supply chain relocation to emerging markets such as Southeast Asia – possibilities and risks
Questions
1.
Apple has strict review standards and a sound control system for upstream supply chain enterprises, which are usually tightly bound to Apple. Can you first analyse Apple’s cooperation model and management strategy with upstream assembly and component suppliers? What is the core difference between it and other brands such as Xiaomi?
2.
What requirements does Apple have for supplier qualifications? What are its review criteria for supply capabilities and products?
3.
Apple changes suppliers once it finds quality problems. For suppliers, orders from Apple are very helpful to their performance growth and branding. Why does Apple have such a big say and such strong control over supply chain manufacturers? Can you analyse its strategy and specific influence?
4.
If there is a new technology or a technical patent that only one supplier can provide, especially when it is a domestic manufacturer, how does Apple usually respond?
5.
TSMC remains Apple’s core chip supplier. At which supply chain stages does Apple develop single suppliers?
6.
How great does Apple depend on TSMC or how strong is Apple’s say in its cooperation with TSMC?
7.
On 8 November 2022, Goertek was informed by its foreign key account Apple to suspend production of one of Apple’s intelligent acoustic machines. It has been estimated that the suspended machine refers to AirPods Pro 2 due to Goertek’s sluggish yield ramp and improper glue supplier selection. Goertek’s revenue may drop by no more than RMB 3.3bn in 2022 due to the suspension. What do you think are the reasons behind the suspension?
8.
Apple has shifted the orders from Goertek to Luxshare. As an OEM for Apple’s headphones, what are the benefits of this capacity shift for Luxshare or how has this capacity shift contributed to Luxshare’s revenue growth? What about the growth opportunities of Luxshare as an OEM for Apple?
9.
The order cut has exerted a huge impact on Goertek which has technical advantages in design and acoustics. What is the impact of the AirPods Pro 2 production stop on Goertek’s revenue? How will the cooperation between Apple and Goertek change in the future? Will Goertek get the order for AirPods again?
10.
What are the differences between Goertek and Luxshare in manufacturing headphones? What about the differences in the model of manufacturing AirPods and product types? How have these differences affected their gross profit margins or net profit margins for producing headphones?
11.
What are the gross profit margins of AirPods for Goertek and Luxshare?
12.
The order cut mainly affects the relationship between Goertek and Apple. Will it also affect Goertek’s business relationship with its other clients such as Oppo, Vivo, Xiaomi or Facebook?
13.
Will Apple move its supply chain out of China? What is the trend for Apple to relocate its supply chain away from China?
14.
With the development of the AR market, can China’s AR supply chain undertake AR-related production capacity? How to judge the importance and status of China’s supply chain in the AR market?
15.
What are the differences across Apple’s yield requirements for different products such as AirPods, iPhone and iWatch? What are the specific requirements for the yield?
