SAN FRANCISCO—Apple Inc.'s position as the largest buyer of chips gives the firm a dominant position over suppliers. But in the critical Asia-Pacific region—where most chips are bought—local OEMs are increasing spending faster and giving Apple a run for its money in supplier relationships, according to a market research firm.
Semiconductor spending among OEMs headquartered in the Asia-Pacific region is projected to grow by an average of 6 percent in 2012, compared to 2.5 percent growth for all global OEMs, according to IHS iSuppli.
But of all OEMs buying chips in the Asia-Pacific region, the largest spending increases are expected to come from three local companies—Taiwan's HTC Corp. and China's ZTE Corp. and TCL Corp., according to IHS.
"Local companies have led, are leading and will lead the Asia-Pacific region in semiconductor spending growth—not the larger OEMs headquartered elsewhere, such as Apple, Hewlett-Packard Co. and Dell Inc.," said Myson Robles-Bruce, senior analyst for semiconductor spending and design activity at IHS, in a statement. Asia-Pacific is the largest global region for chip purchasing and is set to outperform the rest of the world in coming years, according to IHS.
According to Robles-Bruce, while Apple's size gives it enormous advantages in terms of component supply and pricing, "the Asia-Pacific players are playing to their home-field advantage, wielding in Asia the same kind of influence that Apple now enjoys globally."
@kinnar- not sure I follow. But I think what you are trying to say is that companies like HTC, ZTE and TCL are increasing their chip buying in percentage terms from a lower base than Apple, which is projected to increase from $25 billion to $28 billion. At some point, sheer size gets in the away of the growth rate.
The overall sales of the local companies will be surely higher as compared to the known giants, but at the same time local companies will be paying more price as compared to the known giants,and buying conditions as will not be stringent. These are all the factors increasing local sales.
This is an interesting market factor in mobile.
Local OEMs/Samsung/Apple all have dominant position over chip suppliers. Net effect profit margins are NOT like the PC space where Intel holds power over OEM/Samsung/Apple.