Unlocking Apple’s iPhone supply chain strategy

Apple has emerged as one of the foremost companies for innovative products with short product life cycle. Backed by superior hardware components from best in the industry and focusing on its inherent R&D (research and development) capabilities, it has been delivering technological superior products that have set benchmark for other competitors. By creating its own niche through rigorous investment in software innovation, it is continuously delivering superior products. But, looking inside one of the innovative and profitable supply chain reveals a strategy that is based upon a careful integration of various elements. Its elements have been meticulously separated into in-house and outsourced elements. Hardware and manufacturing activities are outsourced while software, marketing and sales are done by Apple. Data is referenced from IHS iSuppli Research, 2012 from post on https://technology.ihs.com/411502/many-iphone-5-components-change-but-most-suppliers-remain-the-same-teardown-reveals.

State of art key hardware procured from vendors for different parts in descending order of component value is

The company invests in improving the standards of supplier base across globe. A list of top 200 suppliers is available at https://images.apple.com/supplier-responsibility/pdf/Apple-Supplier-List.pdf. Low cost manufacturing expenses is incurred by subcontracting of assembly to Foxconn in China. To reduce supply chain risks associated for various procured components, Apple procures most of parts through multiple sources. Since, market for Apple user is known with certainty, the supply chain is tailored and can be easily flexed to change design configuration. In spite of such robust design, it faces risks from various natural, man-made disasters and competition.
While above data provide insight into manufacturing and procurement costs, it has other investments such as software development, human resources (unique), marketing, sales etc. But, Apple with its dedicated sales outlets are able to curb down further distribution costs.