Other than the best-of-class, Apple designed A7 64-bit CPU, Apple often lags behind other smartphone makers with lesser screens, less powerful batteries, and expensive storage options. This often happens because Apple suffers from its own success.
It’s The Parts
Unlike Microsoft, Samsung, Google, Amazon, HTC or anyone else that makes a smartphone these days, Apple is constrained in two ways by the number of iPhones it makes each year.
The first constraint is that Apple has very few iPhone models. All the iPhones have similar memory, similar screens (both size and resolution), and similar batteries.
That means those components must be available in higher volumes than any competitor, including Samsung.
Those components can be and must be manufactured in very high volumes to meet Apple’s sales numbers. Even with a complex and multi-tiered component supply chain, Apple cannot always get the volume it needs for the latest components.
Meanwhile, Apple’s competitors, who ship far fewer products, have access to newer components with improved functionality and capability. Why? Because their component manufacturers don’t have to make as many of the newer components because Apple’s competitors don’t sell as many units.
In many respects, Apple’s hands are tied because the company is so successful– the volume of some newer and improved components simply are not yet available in the numbers and yields that Apple needs.
Change Is Coming
2014 promises to be a different year for Apple and the component supply chain. How so?
Last year, Apple introduced two iPhone models. That was a first, though both shared some components. This year, I predict Apple will introduce two additional iPhone models– a 4.7-inch iPhone, a 5.5-inch iPhone, as well as the standard 4-inch iPhone (which outsells every other smartphone on planet earth).
The variety of screens and battery sizes will ease the component volume problems from the supply chain that Apple has experienced in recent years, allowing the company to have the latest versions spread across a broader line of iPhones models.
It’s math. Each iPhone model will require smaller production runs for major new components than when Apple’s iPhone was limited to a single model which sold in far greater quantities. Apple has been known to withhold new features which end up being components in next year’s products.
The iPad Air and iPad mini are good examples. Why didn’t Apple include a Touch ID fingerprint sensor in the new iPads when introduced last year? Because it could. That, and improved screens, give Apple something to crow about later in 2014 when new models with better screens and Touch ID sensor will appear.
I look for the new and larger iPhones to not share many of the same components. Already there is talk that the 5.5-inch iPhone will support an improved camera with image stabilization and other features not found on smaller models.
It’s all about parts, and Apple is about to get more competitive with newer components.