Apple's Flair For Design Makes A Major Impact On The Supply Chain - InformationWeek

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Apple's Flair For Design Makes A Major Impact On The Supply Chain

An increase in semiconductor spending in the supply chain? Chalk it up to the iPhone and the iPod, researchers with iSuppli report.

Apple's design activity around the iPhone and its hugely successful iPod is exerting a major impact on the global electronics supply chain, a market research firm said Wednesday.

Apple's product design work in the first half of this year drove the largest increase in semiconductor spending among the top 10 electronics equipment manufacturers in the United States, iSuppli said. Product design leads directly to equipment production, which in turn drives semiconductor sales.

"Companies that engage in design of electronic equipment, such as PCs, mobile phones, and televisions, also are responsible for specifying the use of particular chips in the products being developed," iSuppli analyst Min-Sun Moon said in a statement. "Thus, these companies have a major influence on global semiconductor spending patterns."

For the first half of the year, iSuppli ranked Apple fourth overall in terms of design influence on semiconductor spending in the United States, trailing Hewlett-Packard, Dell, and Motorola. Apple, however, had the fastest growth of design influence of any company in the nation.

Apple's work spurred $3.8 billion worth of global semiconductor purchases, up 27% from $3 billion in the same period last year. The surge in influence was mostly because of the iPhone mobile handset, which Apple released in late June.

ISuppli predicted Apple would ship more than 4.5 million iPhones globally in 2007, 13.5 million units in 2008, and 21.1 million units in 2009. The researcher also predicted that a second version of the iPhone would be released in 12 to 18 months.

The iPhone line would cause Apple-driven semiconductor spending to continue to grow in the second half of the year, as well as into 2008, iSuppli predicted. Beyond Apple, HP, Dell, and Motorola, other leading design influencers in the United States included Cisco Systems, Kingston Technology, and IBM.

ISuppli ranked the United States as the world leader in terms of design influence in the first half of the year, followed by Japan.

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