Nintendo and Apple battle for components provided by supplier

An article in the Wall Street Journal (May 30, 2017) titled “Nintendo battles Apple for parts as Switch demand rises”, describes supplier parts NAND flash memory chips, liquid crystal displays and tiny motors used by both companies in their products.  Flash memory demand increase have been caused by growth in web services, demand for the iPhone 7, projected demand for the new iPhone and thus put pressure on availability of components to serve Nintendo’s products.  Will component price increased force rationing of parts and thus resolve the problem ? Will design changes by OEMs provide relief ? Or this is the result of competitive behavior by the OEMs to edge out the competition for downstream products ? Do you expect upstream manufacturers to add capacity to resolve this issue or stay content with higher prices for the limited capacity ?

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About aviyer2010

Professor
This entry was posted in Capacity, competitiveness, Cost, flash memory, manufacturer, Supply Chain Issues, technology and tagged , , , . Bookmark the permalink.

One Response to Nintendo and Apple battle for components provided by supplier

  1. Kyle Harshbarger says:

    The lifespan of the Nintendo Switch is long enough to rationalize increasing capacity, but Apple’s products will depend on future design. If Apple wants to use the same parts in future designs as well, then increasing capacity increases the pie for everyone.

    I don’t think Nintendo and Apple are trying to edge out competition because adding capacity is always an option for the component manufacturers. If Samsung wants to use the same component for their new product, they will have to include capacity expansion in the supplier contract.

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