What the Future Holds

Apple’s decision to use “recycled parts” from the iPhone 6 in their recently launched iPhone SE seems to be incongruous with the company’s traditionally incredible execution of and commitment to superior supply chain management. Some of the recycled chips had been sitting in inventory for nearly a year, a significant departure from Apple’s standard of innovative “freshness.” This use of backlogged parts suggests that Cook is working to eliminate excess inventory, and that it’s a symptom of a sales slowdown and the first decline in revenue the company has ever experienced.

This slowdown is having a significant impact in Japan, where 139 of Apple’s suppliers are projecting double-digit profit declines this fiscal year. Suppliers in China and all across Asia, too, are feeling the effects of the drop in iPhone sales, and many are looking to temper their dependence on Apple by expanding their services to Chinese smartphone makers and the automobile industry. How the suppliers’ expansion will affect Apple’s supply chain remains to be seen, but it’s safe to say that Cook will tackle any issues head on -- after all, overcoming unexpected challenges is old hat for this tech giant.


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