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Apple In China: Apple’s Place In China Is Cloudy

Apple In China: As you can imagine, a company such as Apple Inc. (NASDAQ:AAPL) has all the supply chain contacts it needs to handle anything that comes the company’s way. Cupertino may face issues from time to time, just like its competitors, but it never holds the company down for too long.

Apple Inc. (AAPL) to be Added to Several WisdomTree ETFsWith this in mind, we want to take a closer look at a recent Apple Inc. (NASDAQ:AAPL) related story published by DigiTimes. They are reporting that several smartphone components are in short supply in the China market.

“A shortage in the supply of some key components, including high-end camera modules, touchscreen panels and multi-chip package (MCP) memory chips, is worsening in the smartphone industry supply chain in China, according to industry sources.”

With so much competition for smartphone market share, the pressure on supply chain manufacturers is heating up. Although these companies will often times do whatever it takes to make the tech giants happy, there is only so much they can do.

The source went on to add that both branded and white-box smartphone makers have been stashing high demand parts since the end of the first quarter. This was due in large part to a warning by MediaTek that a possible shortage could be forthcoming.

What does Apple Inc. (NASDAQ:AAPL) have to do with this? For one, the company is spending a lot of time and money to make its mark in China. For this reason, it needs to have access to all the appropriate parts without delay.

This is a problem, as you will see from this information provided by DigiTimes:

“The pace of inventory build-ups have been unable to catch up with the growth in demand for smartphones in China and other emerging markets, said the sources, noting that overall shipments of smartphones by China-based makers for domestic and overseas sales have skyrocketed to 30 million units a month recently compared to 20 million units in the first quarter of 2013.”

With all this in mind, Apple Inc. (NASDAQ:AAPL) is not in nearly as bad a shape as some other companies. The reason for this is simple: it is among a group of smartphone vendors that is typically able to move to the front of the line

For example, DigiTimes added “supply of high-end camera modules has been tight since the beginning of 2013 due to strong demand from smartphones vendors including Apple, HTC, and others in Korea and Japan.”

In other words, when the demand from Apple goes up, there is less for everybody else.

While it is difficult to say if the sources quoted by DigiTimes are accurate, it will be interesting to see how Apple reacts if true.

Check back here for more updates on Apple In China.

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