Is Apple cutting costs a tad too far in an effort to make even bigger profits than the billions they currently make?
In the UK Apple has sent threatening letters to an 11 year old schoolgirl whose iPhone exploded and around the world hundreds of Macbook owners are complaining about design flaws with their notebooks with plastic cases cracking and hairline stress fractures appearing in the chassis of Apple Macbooks.
In the last quarter Apple reported a 36% margin on the sale of their products which is exceptionally high by industry standards. HP and Acer have margins of around 20%.
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Dealing with Apple is a difficult process. While the Company can deliver big production numbers they are exceptionally demanding when it comes to negotiating a price according to several manufacturers who have dealt with Apple in the past.
One Chinese vendor told ChannelNews earlier this year that several suppliers are struggling to supply Apple with quality components because Apple always wants “The best deal and this does not always translate into the best products” they said.
In the past there have been occasions, when vendors have dealt with Apple only to report record losses on the supply of components for products like the Apple iPod. A classic example is Samsung who made big losses two years ago supplying flash memory to Apple.
Five years ago Fujitsu lost millions supplying hard drives to Apple when hundreds of them overheated. These were replaced with drives from Toshiba.
Now new questions are being raised about the quality of Apple products, with the company formally refusing to acknowledge that any flaws exist at all.
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A major supplier to Apple is Chinese company Foxconn who last month found themselves under investigation after an employee committed suicide after being accused of stealing an iPhone. Foxconn who are under constant pressure to cut costs have been a long time supplier to Apple with insiders claiming in the past that Apple “always demands low manufacturing costs”.
In the past, Apple has used Asustek and Quanta Computer to build their Macbooks computers. Now, consumers are complaining that, within months of them buying a Macbook, cracks and hairline stress fractures are appearing.
There has also been complaints of failed hinges, palm rests and split air vents, with some users now resorting to the threat of legal action not because Apple have refused to acknowledge the problem, but when they have, the problem has reemerged in a new Macbook.
This raises serious questions about the plastic moulding process that Apple is using as well as the quality of components going into Apple PC’s which are among the most expensive of PC products on the market today.