1 Reason Apple’s 2018 iPhone Might Be Controversial

When Apple (NASDAQ: AAPL) had to decide on the source for the cellular modems that would go in the iPhone 7 and iPhone 7 Plus smartphones it unveiled last year, it picked two companies: Qualcomm (NASDAQ: QCOM) and Intel (NASDAQ: INTC).

Sourcing components from multiple suppliers is smart for a couple of reasons. First, it reduces risk, particularly as supply problems with one vendor won't wreak nearly as much havoc as they would if they were the only vendor.

Second, by actively supporting more than one supplier, Apple shifts bargaining power away from a potential sole-source and toward itself, potentially leading to lower component costs and higher profit margins for the buyer.

Source: Fool.com