Contents

The special analysis on Apple's new PC ecosystem strategy and how Apple is building a new supply chain with more China suppliers and more regional capacities in South East Asia.

Key Findings

  • Apple has been using its own developed central processing unit (CPU) for the iPhone and iPad, which was based on the ARM platform. Apple will start to implement its PC CPU in its MacBook series from now on.
  • The next MacBook Pro will be upgraded as a 14.1-inch, differentiating itself from the market proposition of the MacBook Air, which has the advantage of mobility, and the MacBook Pro, which values performance.
  • Although Taiwanese makers still have most of their assembly capacities in mainland China, they are beginning to shift some capacity to the Association of Southeast Asian Nations (ASEAN) countries, including Vietnam, India, Thailand, and Malaysia.

Apple’s new PC ecosystem

Apple’s supply chain management can be broken down into three categories—the displays, the OEM and ODM integrators, and the components. For the iPhone and iPad, Apple has been using its CPU, which was based on the ARM platform. Apple will start to implement its PC CPU in its MacBook series from now on.

This means that Apple intends to build a new PC ecosystem after establishing a successful smartphone ecosystem with the iPhone. This new ecosystem will shift from the previous x86 CPU platform to focus on Apple’ s own CPU and ARM platform, while the software will be built on Apple’s OS X.

The new Apple PC ecosystem is shown below.

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With the new ecosystem, Apple is now extending its display, OEM/ODM assembly, and component supply chain to include more mainland Chinese suppliers for diversification purposes. On the other hand, Taiwanese suppliers have been playing key roles in supplying Apple the electronic components for its iPhone, iPad, MacBook, and iMac products; these Taiwanese suppliers have had giant capacities in mainland China. However, these Taiwanese makers are now moving to other regions, particularly Southeast Asia and India, to reduce their costs as well as to leverage the risks and costs amid the trade dispute between mainland China and the US.

MacBook PC and display supply chain change  

Apple’s MacBook series, including the MacBook Air and the MacBook Pro, is one of the examples of the company’s strategic shift.

The display of the MacBook Air Retina is expected to be updated again in the second half of 2020 (2H20) with its color accuracy upgraded to DCI-P3. The refreshed MacBook Air Retina with Apple silicon (CPU) will target light computing users, by the conjunction of the previous 12-inch MacBook segment.

The next MacBook Pro will be upgraded as a 14.1-inch, differentiating itself from the market proposition of the MacBook Air, which has the advantage of mobility, and the MacBook Pro, which values performance.

The display upgrades for the next MacBook Pro are as follows:

  • The frame rate is increased to 120Hz. Besides improving the gaming experience, internet browsing will also be smoother, like what the iPad Pro, which also has a 120Hz frame rate, offers.
  • The 16-inch MacBook Pro will reportedly use mini LED backlight technology, and mass production is expected to start in late 2020.

The following shows the MacBook 2020 display panel purchasing allocation and MacBook PC refresh plan.

Apple has started to introduce its new mainland Chinese display supplier, BOE into the MacBook PC display supply chain.

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Apple’s display supply chain

The following shows the changes to Apple’s display supply chain.

Apple is ushering in BOE as its new supplier for notebooks, tablet PCs, and iPhones.

Meanwhile, the display makers are starting to move their backend module assemblies from mainland China to other countries, like Vietnam. South Korean display makers have already established considerable LCD and OLED module capacities in Vietnam.

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Apple’s OEM and ODM assembly  

The following shows Apple’s OEM and ODM assembly makers or system integrators.

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There are two important trends to note:

  • Taiwanese makers are still critical for Apple’s product assemblies, but new mainland Chinese suppliers like Luxshare-ICT and BYD are emerging.
  • Although Taiwanese makers still have most of their assembly capacities in China, they are starting to shift some capacity to ASEAN countries, including Vietnam, India, Thailand, and Malaysia.

Apple’s component suppliers  

The following shows Apple’s component suppliers.

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There are two important trends to note:

  • Taiwan makers are still critical for Apple’s component supply but based on the cost consideration and volume supply, Apple is currently increasing its mainland Chinese component suppliers. 
  • Although Taiwanese makers still have most of their component manufacturing capacities in Taiwan and mainland China, they are starting to shift some capacity to ASEAN countries, including Vietnam, India, Thailand, and Malaysia.