Tue, Mar 05, 2019 - Page 14 News List

Uncertain Future for Taiwanese suppliers as Apple transitions from hardware
蘋果由硬轉軟:台商面臨危機

Former Apple Inc. senior vice president of retail and online stores Angela Ahrendts speaks with a worker at Apple’s new retail store in San Francisco, California, US.
前蘋果公司零售及線上業務高級副總裁安吉拉·阿倫茨(左),在美國加州舊金山一家新開的Apple Store與一位員工交談。

Photo: Reuters
照片:路透

As early as three years ago, voices within the market began to talk down Apple Inc’s stock. Naysayers at the time were forced to eat humble pie after a succession of financial reports appeared to show Apple remained in rude health. Then, in the fourth quarter of last year, annual sales revenue from the company’s iPhone product lineup fell by 15 percent, finally knocking Apple’s share price off its pedestal. As with competitors such as Samsung Electronics, Apple has been unable to avoid sales of their smartphones hitting a ceiling. According to recent international media reports, Apple is currently undergoing a reshuffle of senior management in order to reduce the company’s dependence on the iPhone. Once the dust settles, however, it is difficult to see how Taiwanese suppliers of Apple’s iPhone supply chain will be able to continue to sup on their accustomed milk and honey.

Apple’s senior vice president of retail, Angela Ahrendts, is the biggest scalp of the reorganization process to date. Ahrendts joined the company in 2014, poached by Apple chief executive Tim Cook for a princely sum from fashion retailer Burberry, and was at one time viewed as a possible successor to him. Although Ahrendts certainly was successful in turning the iPhone into an exclusive luxury brand — at least from the perspective of eye-wateringly high prices — her departure feels like an admission of failure from Apple, and perhaps marks the end of the company’s quest to turn itself into a high-end luxury brand.

With the development cycle of smartphone hardware having hit a ceiling, it appears that Apple is carrying out a restructuring of senior management positions in an attempt to reorientate the company away from hardware toward software. However, both the content that Apple produces and the company’s app-based sales platform rely on, and are supported by, the iPhone in addition to other hardware produced by Apple. Transitioning the company away from hardware toward software will therefore pose a significant challenge.

TODAY’S WORDS
今日單字

1. reshuffle; reorganization; restructuring n.

重組 (chong2 zu3)

2. senior management phr.

高層 (gao1 ceng2)

3. reorientate; realign v.

轉向 (zhuan3 xiang4)

4. replace v.

換掉 (huan4 diao4)

5. mindset n.

思維 (si1 wei2)

6. supplant v.

取代 (qu3 dai4)


Realigning the operational focus of a large corporation is as ponderous as turning around an oil tanker, and cannot be achieved by simply replacing one of the company’s directors. By way of example, it took Microsoft Corp several years to gradually replace the majority of its core upper management positions from executive vice president level upwards. Only then was the company able to break free from its old operating system-based mindset and successfully transform itself into an AI and cloud computing giant. In 2014, when Amazon released its Echo smart speaker and AI voice-enabled assistant, Apple was still complacently wallowing in past successes. Today, Amazon’s Echo not only wipes the floor with Apple’s AI personal assistant, Siri, but — supported by an ever-enlarging third-party install base — the Amazon Echo platform is snapping at the heels of Apple’s iOS.

The steps Apple is taking to transition away from hardware should be taken as a stark warning to those Taiwanese manufacturers that form part of its supply chains. As Chinese companies gradually supplant their Taiwanese counterparts as specialist hardware manufacturers, if the TAIEX continues to be dominated by Apple’s supply chain component manufacturers, Taiwan’s manufacturing industry will eventually be reduced to nothing more than a bit player in the market.

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