Apple cuts Osram from supplier list, adds Philips

SAN FRANCISCO • Apple swapped out Osram Licht from a list of its biggest suppliers and added Royal Philips as part of a supply chain reshuffle ahead of the release of the iPhone 7.

The revision to the catalogue of Apple's top 200 parts providers is a boon to Philips while it searches for a new buyer for its light-emitting diode (LED) unit. It is a blow to Osram, which is investing €1 billion (S$1.5 billion) in a plant that builds semiconductors used to make LEDs.

LEDs are used not only in the flash for iPhone cameras, but also in infrared sensors that detect a phone's position against a user's face and allow the Apple Watch to measure the wearer's pulse.

While Apple publishes a list of its top suppliers, it does not specify which component comes from each company.

Osram and Philips declined to comment on the list, which Apple published on Thursday.

Apple shares closed 0.5 per cent lower on Thursday in New York at US$108.99 (S$147). Shares of Osram fell 0.36 per cent to €43.47 in Frankfurt yesterday.

Apple released a smaller version of its iPhone this month, the "SE". Since the company will likely sell fewer of the handset than its larger cousins, the 6s and 6 s Plus, the model presented an opportunity for Apple to try out new suppliers ahead of the iPhone 7's introduction later this year, according to Cowen & Co analyst Tim Arcuri.

The high-profile Apple contract may help Philips boost the price for its Lumileds unit. Meanwhile, Osram is divesting its traditional lighting business to focus on LEDs.

Chief executive officer Olaf Berlien wants to secure lucrative technology customers akin to Apple to reduce Osram's dependence on the automotive lighting industry.

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A version of this article appeared in the print edition of The Straits Times on April 02, 2016, with the headline 'Apple cuts Osram from supplier list, adds Philips'. Print Edition | Subscribe