Apple supply chain strength weakens competition
At a time when supply chain managers are cutting back on inventory stockpiles and moving more and more to Just-in-time practices, Apple is going the other direction, and is showing strong returns.
Apple’s supply chain prowess is becoming a little too powerful, however, as seen in the tablet market. Apple has been able to dominate the tablet industry thanks to an omnipotent supply chain that is hurting its competitor’s ability to compete.
Companies like HP and Samsung are struggling to compete in the tablet marketplace, and one source says that Apple’s dominance of the supply chain is to blame.
“Apple has put a ton of work into building a supply chain and technological prowess that is second to none,” a report on The Next Web said. “This has made competing with it an incredibly difficult proposition.”
HP has discontinued its TouchPad tablet, further strengthening Apple’s position in the tablet industry.
Apple has many inherent advantages over its competition in the technology marketplace, thanks to a wealth of cash reserves and an investment portfolio in the manufacturing industry that puts its competitors at an extreme disadvantage.
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According to The Next Web report, “Apple has exclusive deals with hardware manufacturers for the best parts,” saying that HP wasn’t able to compete because it can’t get the same cutting-edge components as Apple. Touch screen displays were specifically named in the report, as Hewlett-Packard would have to wait for Apple’s exclusivity deals on hardware to run out before HP would have access to them.
By then, however, it’s too late, as Apple has moved on to bigger and better components. This “stymies innovation in other companies by using (Apple’s) power to cut exclusive deals,” the report said.
Apple has churned out many innovative products over the years, but its monopoly of sorts in the tablet industry ironically could be doing more harm to innovation than good. Companies that look to compete with Apple’s technological juggernaut must break through the innovation dreadlock that has gripped the industry.