Apple Reportedly Sought To Cut Prices For iPhone 7 Components

As the launch of its iPhone 7 smartphones is drawing near, Apple is revealed today to have attempted to make deals with its Taiwanese suppliers, asking the latter to lower the price points for their products. However, the suppliers have rejected the Cupertino-headquartered tech giant’s request, citing that they could not risk their reasonable profits at this time.

DigiTimes published a story earlier today to reveal what had transpired between Apple and its iPhone components suppliers. According to the supply chain monitor, Apple asked its Taiwanese suppliers — save for Taiwan Semiconductor Manufacturing Company (TSMC) and Largan Precision — to make some adjustments on their quotes for the parts and components they supply for the iPhone 7 handsets.

Apple reportedly sought to have the price points lowered to as much as 20 percent, since mainland China-based parts suppliers offer the same products at lower price points. Unfortunately, Apple’s request was met with resistance by Taiwanese downstream parts suppliers Advanced Semiconductor Engineering (ASE) and other companies under the Foxconn Group, citing that their reasonable profits will be compromised.

DigiTimes pointed out that Apple’s request did not make sense because Taiwan-manufactured and China-manufactured components are on different levels in terms of quality. Furthermore, it was also revealed that Apple asked for lower quotes though its order volumes dropped by 30 percent compared to last year’s volumes when it was manufacturing its iPhone 6s and iPhone 6s Plus devices.

Meanwhile, Apple excluded TSMC and Largan Precision from its request because there are no alternative sources to the products they make. Apple Insider reported that TSMC is the manufacturer of the A10 chip, while Largan Precision is the supplier of the iPhone camera modules.

The iPhone 7 and the iPhone 7 Plus are slated to debut on Sept. 7. Both devices will not have headphone jacks, but they will come with fast charging capability and enhanced features. On the other hand, the iPhone 7 Plus is rumored to sport a dual-lens camera system.