Apple has been feeling rather "frustrated" lately.

Just as the foldable iPhone Duo hit the market, screen failures became the focus of public opinion. Multiple users reported abnormal noises during the unfolding process of the new device, followed by cracks and white lines near the screen crease, with some devices even experiencing black screens. Before one wave subsided, another rose: news that "ChangXin Memory Technologies rejects Apple's order" quickly fermented online, and Apple's plan to secure memory chip supply at low prices fell through.

Both incidents point directly at the global supply chain management "art" that Apple has always prided itself on. Regarding the phone screen failures, Li Nan, founder of Angry Miao, said, "So many display brightness issues and screen cracking problems with Apple's foldable screen essentially stem from the fact that they have grown unfamiliar with the supply chain. Unlike in earlier years, Apple's designers and engineers used to live and eat on China's supply chain."

Whether Apple's relationship with the Chinese supply chain is becoming estranged cannot be confirmed, but the ChangXin Memory Technologies matter simply and clearly proves that Apple's bargaining power has been hit like never before.

In the past, Apple was always the "rule-setter" in the supply chain. Now suppliers have begun to have the confidence to say "no." As foreign media reported, memory manufacturers that had long been suppressed are trying to use AI to launch "revenge" against Apple. In this new round of profit distribution, is the era of Apple's dominance coming to an end?

Cracks Appear for the First Time in Apple's "Rule"

In addition to ChangXin Memory Technologies rejecting Apple, another recent incident sent the same signal to the outside world.

Some time ago, Apple's official website announced a price adjustment without any prior notice. In an interview, Cook directly blamed memory manufacturers, complaining that prices had risen too high. U.S. memory giant Micron Technology was displeased and fired back directly, with executives sarcastically noting that the current memory shortage was entirely due to "certain major customers" frantically driving down prices during the industry downturn years ago, causing memory manufacturers to suffer huge losses and have no money to invest in new capacity.

Behind this war of words is a shift in the balance of supply chain discourse power. Previously, because Apple's procurement volume was extremely large, it had the final say at the negotiating table and pushed hard on prices, leaving suppliers to swallow their grievances. Now, memory manufacturers' products are in such demand that Apple is the one lining up, and the "Microns" naturally have the confidence to spar with it.

How terrifying is Apple's supply chain management and control over suppliers? According to reports, Apple mandates that suppliers list it as a "most-favored customer" and regularly audits supplier accounts to ensure no competitor enjoys lower prices. It even uses this to obtain real-time capacity data from supplier factory production lines in order to judge the other party's bargaining bottom line during negotiations.

Not only that, Apple sometimes refuses to take delivery on time after securing low-priced orders—if market prices continue to fall, Apple can use the opportunity to push prices down further.

Apple's "dominance" leaves suppliers almost no room to bargain at the negotiating table, and what has gradually accumulated their dissatisfaction is the enormous profit gap. In 2023, flash memory prices fell to historic lows. According to Bernstein Research estimates, the flash memory industry posted operating losses of up to $19 billion that year, while Apple recorded approximately $14 billion in gross profit from its storage upgrade business alone during the same period.

For nearly 20 years, Apple has relied on its unique products to build one of the most mature and efficient global supply chains in the consumer electronics field, turning the supply chain into its own moat. With its massive procurement volume and clever balancing tactics, its "rule" over this industrial chain could be described as unbreakable, firmly suppressing all suppliers. However, a wave of AI technology has brought chip manufacturers larger customers and profits, giving them bargaining initiative for the first time.

Memory is a strongly cyclical industry: high prices stimulate capacity expansion, expansion leads to oversupply, and oversupply leads to price declines. Prices will certainly fall in the future, and the bulk of profits will return to brands and channels, but as long as cloud service providers' orders remain, the situation in which Apple alone calls the shots may not reappear.

The Dependence of Apple Chain Companies Is Weakening

Foreign media once reported that a former Apple executive recalled that before the first-generation iPhone launched, Apple temporarily changed the screen from plastic to glass. Because the design adjustment occurred just weeks before the product launch, manufacturers had to rework production lines. After the new glass screens arrived at the factory late at night, workers were quickly organized on site to start production. According to the executive, the factory achieved a production capacity of more than 10,000 iPhones per day within 96 hours.

In manufacturing and production, Apple's supply chain capability has never been just about purchasing external capacity; it also includes deep involvement in processes, equipment, and suppliers' R&D paths. It long stationed product designers and manufacturing engineers at supplier factories, participated in the development and validation of production processes, and strongly controlled suppliers.

Therefore, this screen failure easily leads the outside world to attribute the problem to a weakening of its manpower input, participation, and management intensity in the Chinese supply chain. After all, Apple now wants to shift capacity to India as quickly as possible.

Not only does Apple want to reduce its dependence on the Chinese supply chain, but Chinese companies in the Apple chain have also been working toward "de-Appleization." This is not only because over-reliance on a single major customer brings huge operational risks, but also because they have long been dissatisfied with the distribution of benefits over the years.

As early as 2016, reports said Apple had asked downstream component suppliers in Taiwan, China, to cut their quotes by about 20%, which was collectively opposed by suppliers. Advanced Semiconductor Engineering and a Foxconn Group company directly stated that they would not accept Apple orders without reasonable profits. In 2020, foreign media also reported that Foxconn's relationship with Apple was deteriorating, starting with Foxconn exaggerating and misreporting the number of workers it needed in order to improve its thin profit margin.

How low is it specifically? Data cited by foreign media show that Foxconn's gross profit is only a single-digit percentage, while Apple's gross margin is as high as 40%.

For years, Apple chain companies have tried every means to weaken their excessive dependence on Apple, but the results have been unsatisfactory. Now, as the AI era arrives, the center of the global technology stage has shifted from traditional consumer electronics to AI-related industries such as large models and embodied intelligence. New stars are emerging and giants are being re-ranked, which also provides new opportunities for Apple chain companies to de-Appleize.

Foxconn is the most typical example. Based on full-year performance last year, the revenue share of Hon Hai Precision's "cloud and networking products" business has surpassed that of its "consumer intelligent products" business dominated by iPhone assembly. This change first appeared in the second quarter of 2025 and continued to consolidate in subsequent quarters, becoming a major feature of the company's revenue structure transformation.

The shift in business structure means that the world's largest electronics manufacturing giant has successfully transformed from consumer electronics to AI infrastructure, and its labels are no longer just "Apple" but also "NVIDIA." The longest-term value this brings to Foxconn is that Apple, its major customer, no longer determines its life or death, but rather brings mostly short-term shocks or fluctuations.

And when suppliers can achieve this, Apple's "control" over them is weakened in a disguised way.

The Conservative in the AI Era

Apple's passivity in the memory market may not change in the short term. Because tight supply continues, and more critically, even if supply catches up and prices fall, the core demand of the semiconductor industry has already undergone a fundamental shift—from consumer electronics to AI industry infrastructure. Industry estimates show that by 2026, memory demand brought by global AI servers will account for 35% of the overall memory market, and by 2028 this proportion will exceed 50%.

Under such circumstances, it is difficult for Apple to remain a single major customer in the memory market.

TechInsights estimates that two years ago, the flash memory capacity purchased by Apple was almost twice the combined purchases of Microsoft, Amazon, Meta, and Google. Today, the procurement volume of hyperscale cloud service providers has reached twice that of Apple.

This can be said to be a result of Apple's absence from the global AI computing power race. Over the past two years, while other technology giants have spent heavily to expand AI infrastructure layouts and compete in underlying model capabilities, Apple has neither participated in fierce computing power competition nor been enthusiastic about AI feature innovation in its products. The outside world generally believes that it has fallen behind in catching up with the AI era.

It cannot be denied that Apple did underestimate the impact of the AI technology wave on the consumer electronics industry. On the one hand, in memory, the most critical component, Apple has lost the control it was best at; on the other hand, with soaring prices and upstream players thriving, the largest chunk of profit Apple controlled has been eroded. In other words, the extra memory cost Apple pays for each product is effectively paying for other giants' AI infrastructure.

And dangerously, Apple passing the pressure of rising costs on to consumers may well cause weakness on the consumer side.

Initial data from the latest IDC quarterly mobile phone tracker show that in the third quarter of 2026, China's smartphone market shipped about 57.9 million units, down 15.4% year on year. Compared with the roughly 4% year-on-year decline in the first half of this year, the market is slowing further. With overall consumption sluggish, whether Apple can still maintain growth is the biggest question.

The foldable iPhone Duo was originally regarded as a key driver for boosting sales, but it got off to a bad start, and screen failures may make consumers choose to wait and see.

However, it is worth noting that public opinion seems to be reversing. At the close last Friday on the U.S. stock market, Apple's market value stood at $5.03 trillion, reclaiming the title of the world's most valuable company from NVIDIA. This market value comeback shows that the capital market is reassessing "lagging" Apple. Compared with other technology giants' heavy investment in AI computing infrastructure with uncertain returns, Apple's relatively restrained capital expenditure and strong cash flow actually make it less risky.

If the AI boom fades, there is no doubt that Apple is better positioned to occupy a favorable position after the bubble bursts.

Of course, this is a huge bet. If AI truly takes us into a higher level of intelligent era, the old order will be broken and interests will be redistributed. If Apple still has no "ace" of its own, it will eventually lose the initiative.