Why Apple won't refresh all iOS devices this year: The supply chain

Why Apple won't refresh all iOS devices this year: The supply chain

Summary: While it would simplify things for Apple, consumers and Apple's hardware partners if all iOS devices shared a single unified connector, this is unlikely to happen overnight.

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It seems increasingly likely that Apple is going to retire the 30-pin dock connector that's been present on every iPhone since its debut -- along with millions of iPods and iPads -- with a slimmer and more modern connector.

While we have no hard evidence relating to the redesigned connector itself, hardware leaks from multiple sources of what is claimed to be the metal chassis for the upcoming iPhone 5 show a radically smaller dock connector hole on the bottom of the device.

Given the weight of the evidence, I'm now almost certain that a new dock connector is incoming. If nothing else, the existing connector is almost a decade old and a significant number of its 30 pins are legacy.

Talk of a redesigned dock connector has led to more talk that this time around Apple will take the redesigned iPhone 5 dock connector and slap it into all of its iOS devices by the end of the year, including a new iPod nano, iPod touch, the 9.7-inch iPad and the much-rumored but as yet mythical 7-inch iPad Mini.

Gallery: iPhone 5: Rumor roundup

It would certainly simplify things for Apple, consumers and Apple's hardware partners if all iDevices shared a single unified connector, as it would reduce the fragmentation caused by the legacy 30-pin dock and the new dock connector. However, it's rather ambitious to suggest that Apple could pull this off in one fell swoop by the end of the year.

After all, there's a small matter of supply chain.

Apple has staggered the release of new iPhones and iPads, and for good reason. Launching such enormously popular devices puts an absurd strain on the entire component supply chain. Screens and Li-ion batteries in particular are a limiting factor, but so is NAND flash and Silicon-on-a-Chip (SoC) processors.

On top of the supply chain, there's manufacturing issues to take into consideration.

The iPhone 5 launch alone is likely to be massive. During the quarter following the release of the iPhone 4S Apple sold a record 37 million iPhones. Even the iPad 2, which by then had been out for months, saw record sales of over 15 million units over the three-month period.

Releasing a new iPhone, iPad and an iPad Mini over what remains of 2012 would put an enormous pressure on Apple at a time that it can ill afford to have supply chain issues -- the highly profitable holiday period.

The last thing Apple wants is shortages and delays at this crucial sales period.

My bet -- based not only on past history but what I'm hearing from the supply chain -- is that Apple will stick to the existing release timetable. We'll likely see an iPhone announcement -- where we will also see new iPods announced -- come September or October, and this will be followed by an iPad announcement early next year.

As to the speculative 7-inch iPad Mini, it might make sense for Apple to get this out of the door by the holidays, especially if the Cupertino giant wanted to take some of the wind out of the sails of Amazon's Kindle Fire -- possibly the Kindle Fire 2 by then -- and Google's Nexus 7 tablets.

That said, given that iPad sales are still incredibly strong, the introduction of a newer, smaller, and cheaper model could cannibalize sales of the higher-priced, higher-margin 9.7-inch iPad during a period where Apple is likely to sell millions of iPads. It might be better for Apple to wait until next year and release the iPad 4 and iPad Mini together.

Also, let's bear in mind that Apple not only sells the iPhone 4S and iPad 3, but also the older iPhone 3GS and iPhone 4, and the iPad 2. Are these older, lower-priced devices going to get new dock connectors too?  

Revamping the entire iOS line by the end of the year would represent the largest hardware restructure carried out by any consumer electronics manufacturer in history.

It's also worth pointing out that even if Apple did revamp the entire iOS lineup, fitting the new dock connector all round, it doesn’t solve everything. Apple has sold hundreds of millions of devices featuring the 30-pin dock connector.

Only time is going to make them go away. It's going to be years before the 30-pin dock connector is gone for good.

Image source: ETradeSupplyNickolay Lamm/InventHelp.

Topics: Apple, Hardware, iOS, iPhone, iPad, Tablets

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74 comments
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  • Don't forget....

    Apples supply chain issue(s) may be compounded by two other issues:

    1. Apple insulting Samsung's tech as "worthless" (I don't remember what news/tech blog I saw it on)

    2. The on-going battle in various courts over patent infringement.

    Personally, if I were Samsung, based on Apple's comments alone, I'd tell them to take their business elsewhere. Granted, as far as I know, the two major components that Samsung supplies/manufactures are the A5 processors & NAND memory for most of the I-devices.
    vinnyboombatz
    • Remember too that this is only business ...

      Corporate giants don't usually bicker over "insults". They see it as part of the game. Competitive advantage. In the public eye. In the courts. It is all gamesmanship and each is waiting for the other "to blink". In the end, they end up exchanging some money and everyone goes home happy because they know that this "cost of doing business" will be passed on to the customer. Each will claim victory in the eyes of their shareholders and life will go on.
      M Wagner
      • Not true at all...

        M Wagner that's just not true. Adobe all but cut Apple off for quite some time back when Apple first 'insulted' Flash. In fact Adobe products in general were released a full year later than the PC counterparts putting a serious dent in Apple's plans as designers were forced to buy Windows in order to keep up with those using Windows based PCs. This went on for years and it's only been recently where you could get Premiere Pro for Apple at all. To date there are no (I mean ZERO), AAA game engines available that run natively on Apple's OS (you can get Blender or Unity but they're both pretty cheesy). There are literally tons of professional programs that follow suit. And I'm talking about programs that dictate whether or not a company buys Apple or Windows in general. I'm talking about companies that buy computers by the thousands. ILM has a 100,000 node supercomputer, but guess what? There's no DaVinci (color correction software) for Apple, there's no Inferno for Apple, no 3D Studio Max. In short, as far as the professional side of film production goes, there's no point in buying anything other than Windows based machines. Truth is only TV Stations and/or Commercial Post Houses use Apple machines. The same goes for game design as I pointed out before because Apple computers can't run Direct X natively. Microsoft won't allow it, and there's no point in making a game that will only run using Open GL when the XBox uses Direct X. It's more likely that Samsung sees Apple's shenanigans as only really being harmful to Apple in the long run. Apple has effectively introduced Quad-HD with the Retina display, there is no media available for Quad-HD so Apple is calling out to developers and the like to create it. Samsung has not only Quad-HD TVs, they have Ultra HD Smart TVs waiting in the wings which will not only absolutely destroy Apple's Retina display (at 16 times the resolution of HD), they support all legacy resolutions, support 3D and run Windows 8. I've seen many, many articles about these sets being rolled out soon (as in next year). The bottom line is Apple is making enemies of the people they need the most. They seem to do this with startling regularity and it always leads nowhere. Adobe and Flash are both still here - Apple users will be forced to find a solution or potentially wind up being cut off from huge portions of the internet.
        kennyrosenyc
        • True, but...

          Adobe and Flash may still be here, but which would you rather be, Adobe or Apple? Apple's obviously been more successful of late, in spite of Adobe's decisions regarding the Mac platform. And in regards to Flash, it's obviously fading. Even Google has given credibility to Apple's criticism of Flash on mobile with their decisions involving Android.

          And don't kid yourself, Samsung needs Apple probably about as much as Apple needs them, and they know it. Their mobile arm may disagree, but their mobile arm isn't the end all be all.
          TroyMcClure
          • The question may be Burn Bright or Burn Long

            In the past Apple burned brightly and then fell. Microsoft helped them back on their feet and they burn bright once more. Adobe has survived about as long as Apple but with less ups and downs. I think Adobe will still be around for a long time like the turtle in the race against the rabbit. Samsung made a lot of money with Apple's products needing all those components but now they have their own products that sell practically as well now using the same or similar components. Samsung seems to be less dependent now and wouldn't be hurt as much with the loss of Apple as a customer. Apple would be at a major disadvantage if they had to switch suppliers at this point.
            Xennex1170
          • Clueless much???

            Apple is Samsungs best customer... Do you think Samsung is going to brush off their best customer?

            That would be as dumb as saying Apple isn't going to do what they want because they might not be able to keep up with demand. Business 101, not being able to keep up with demand because you are insanly popular is the ultimate goal of every business.

            Think about it.
            i8thecat4
          • Clueless MORE?

            There is a difference between "not being able to keep up with demand" and "growing demand outstripping supply".
            Not being able to keep up with demand because of reduced production is not a situation any business aims for. This is what Apple will face if they dump Samsung for 2nd best supply chain.
            That is a lot different to maintaining production capacity and have growing demand for the products.
            In the end, if a customer can't sell an iphone due to supply problems, there is a huge chance these customers will gravitate to Samsung's offerings. Samsung's extra production capacity shifts from supplying Apple with wholesale low-margin components to supplying their own high-margin mobile phone division. Samsung ends up selling phones to plug the gap that Apple leaves behind with supply problems.
            With Samsung now selling their SGS3 like hotcakes with unprecedented levels of promotions outside of Apple, I don't imagine Samsung losing any sleep over losing Apple as a customer. Meanwhile, Apple will struggle without the Samsung supply chain.
            Apple loses, Samsung wins.
            warboat
          • Very clueless but we all knew you were

            Samsung might be Apple's best option but they are not the only game in town. Would Apple feel the pinch taking their designs and going with another supplier, sure they would but Samsung would feel it was well. Just because Samsung would have more capacity for their own products without Apple does not mean they would sell enough to fill that capacity. Neither company got to where they are without realizing the consequences of what they are doing. Those that have the "I'm taking my ball and going home" attitude in regard to the relationship between the two only show they don't have a clue when it comes to business.
            non-biased
          • @i8thecat4

            [quote]
            Apple is Samsungs best customer... Do you think Samsung is going to brush off their best customer?
            [/quote]

            WRONG!
            Samsung is Samsung's best customer.
            Samsung make high margin consumer products to compete with Apple.
            Do you think Samsung is going brush off Samsung to look after Apple?
            warboat
          • Apple Needs Samsung much more

            Apple does nothing for Samsung. They buy large amounts of chips, but thats about it. Samsung sells Apple the chips at very little profit (and sometimes undersells them). Samsung doesnt use their designs, and Samsung designs their processors and memory for them. So if Apple were to disappear, that wouldn't affect Samsung in the least. They will find others to buy their chips at these incredible prices.
            Jimster480
          • Uhm, OK

            Guess that's why Samsung dropped them at the first sign of trouble right?
            non-biased
    • Money trumps hurt feelings

      If Samsung walked away from that deal their board would throw the CEO out onto the street. They make too much money together to let anyone's personal feelings interfere with their bottom line.
      MajorlyCool
      • Not true

        While this might have been true in the past, Apple hurting or blocking the sales of Samsung's key devices causes a much larger dip in Samsung's bottom line than in their sales of chips to Apple.
        Jimster480
        • And ending their relationship does what?

          So Apple wins a case and gets a ban on a Samsung product so they act like little children and refuse to sell to Apple anymore. Now what exactly does this do for Samsung? Their product is still banned but they are not selling nearly as much. Sorry, the people at the executive level of these companies are more mature than that and look at the overall picture, feelings don't come into play at that level.
          non-biased
    • A few flaws in your Samsung strategy...

      One, the contracts between Samsung and Apple for whatever Apple plans to put out the door within the next 12 months are almost definitely already in place, and probably have been for awhile now. I really doubt Samsung wants to get into a breach of contract lawsuit with Apple just to spite them.

      Two, telling them to take their business elsewhere is just flat out foolish from a business perspective. iPad and iPhone are two of the best selling mobile devices. I doubt Samsung's manufacturing/fabrication arm wants to lose that business because their mobile phone arm wants to take their ball and go home.
      TroyMcClure
      • Apple & Samsung

        You seem to think just because Apple make huge margins on their products means their suppliers also makes huge margins having Apple as their customer?
        Dropping Apple as a customer would free up manufacturing capacity for Samsung to make more devices. If supply problems for Apple creates the opportunity for Samsung to sell more phones, then it's doubly good as making high margin products and selling to retail has to be more profitable than selling low-margin components to Apple. It is clearly evident that Samsung is persuing this path and getting themselves from any dependency on supplying Apple. If Samsung stopped supplying Apple tomorrow, Samsung profits would increase in the long run. Apple profits would suffer.
        warboat
        • When did I ever say that?

          What I think is actually quite different. Apple's supply chain success is based in part on negotiating good pricing in exchange for volume. Samsung may not make huge margins on Apple components, but they get huge volume.

          And, quite honestly, it's not a huge secret that Apple has been courting other suppliers, so if and when Samsung would tell Apple to take their business elsewhere (which I bet never happens), Tim Cook most likely has as Plan B (and a Plan C).

          And, it's a huge risk to assume that the manufacturing capacity freed up by kicking Apple to the curb would be filled by increased demand for Samsung phones. There are a ton of Android OEMs out there, so even if Apple had supply issues, it's far reality that Samsung is going to get every sale that Apple might lose.
          TroyMcClure
          • Common sense and thought

            Two things that warboat has never let interfere with his posts.
            non-biased
    • If Samsung told Apple to take their business

      elsewhere, Samsung shareholders would hold an open revolt. I don't think you realize just how much money Samsung makes from Apple.
      baggins_z
      • They dont

        They sell their chips to Apple at incredible discounts and sometimes even at a loss (there have been articles about this before), Samsung can afford to lose Apple as a customer (Apple supply lines hit, Samsung sells way more devices).
        Jimster480