Apple’s Supplier Projects Lower Demand For High-End Chips

Contract manufacturer Taiwan Semiconductor Manufacturing Company (TMSC) has indicated that it expects the growth of smartphone shipments across the industry to grow at a level of between 1% and 3% this year. As a manufacturing partner TSMC collaborates with various mobile chip designers and this includes HiSilicon, MediaTek and Apple.

Taiwan Semiconductor Manufacturing Company has also disclosed that it expects the shipments of expensive smartphones to fall this year as the demand of mid-range and low-end smartphones rises. Consequently TMSC expects its revenues from smartphones will be flat this year compared to last year. This is because TMSC earns higher margins from chips made for high-end smartphones compared to what it makes from chips meant for low-end and mid-range smartphones.

Sales of iPhones

The projections from Taiwan Semiconductor Manufacturing Company are also an indication that with Apple being the biggest customer for its high-end chips, the contract manufacturer is not optimistic about the iPhone maker’s prospects this year.

This comes in the wake of reports that Apple is redesigning its iBooks app for its mobile devices with a view to challenging Amazon in the market for e-books. The new app is expected to be launched in the next couple of months and will feature a simpler interface capable of highlighting books that are currently being read.

The latest version of iOS has also been released and contains a hint that a new digital books app is coming. Instead of iBooks the new application will be known as Books per the software update. In the past other Apple services such as iTunes Podcast and iTunes have rebranded to Apple Podcast and Apple Music respectively.

Digital books

The upgrade is expected to be the biggest Apple has ever undertaken with regards to digital books in years and will enhance the competition in an Amazon-dominated market. In the past selling e-books was once a vital part of the service business of Apple and the iPhone maker once stood a chance of upstaging Amazon. This changed in 2012 when the U.S. Justice Department filed a lawsuit against Apple and book publishers alleging anti-competitive practices. In 2016 Apple was slapped with a $0.45 billion fine.

Many players in the industry came out strongly against the ruling saying it was in Amazon’s favor. Early last year Amazon’s share of the digital books market in the United States was a little over 83% having grown from 74% in October 2015 per AuthorEarnings.

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