The drop in iPhone sales in the first six months of 2016 have seen Apple’s Asian component suppliers take a financial hit. That’s according to sources close to the companies that work in partnership with Apple.
Big names such as Foxconn and Pegatron, which supply the key technologies inside Apple’s iPhones, as well assembling them, are said to be suffering the ill effects of Apple’s decision to bring more firms on board.
By partnering up with a wider array of Asian tech firms, Apple is able to drive costs down while ensuring that its bottom line doesn’t take a major hit from declining iPhone sales. Apple reported its first ever iPhone sales drop in April, nine years after the device first launched. Its revenue was also down, the first time in 13 years.
Potential partners are said to be cutting their rates in order to attract business with Apple. Existing suppliers are in turn looking to other smartphone manufacturers to help pick up the slack.
Apple is preparing itself for slower iPhone sales as the year progresses, especially as its new iPhone 7 is set to offer no more than minor upgrades over last year’s model. That device is due for release in September.
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