“Made in China†or “Made in Korea� The iPhone Still Shapes the Global Mobile Phone Industry Chain
At around 3:00 AM Beijing time on September 13, the long-awaited new iPhone products, which had been teased for over six months, were finally unveiled. Among them, the iPhone X, celebrating its tenth anniversary, was described by Apple CEO Tim Cook as "a glimpse into the future of mobile phones." While it didn’t bring any major surprises, it confirmed several key features such as wireless charging, the removal of the Home button, an OLED full-screen display, vertical dual cameras, and Face ID facial recognition.
From the release of the first iPhone in 2007 to the launch of the iPhone X (iPhone 10), it marked a decade of smartphone evolution. Today, the mobile phone industry is highly mature, and Apple has lost some of the revolutionary aura that defined the Steve Jobs era. However, its influence on the supply chain remains significant.
Huang Yuxi, a research manager at the Semiconductor Research Center at Chiang State Consulting, believes that Apple’s new features—like wireless charging, face recognition, and depth cameras—will push other manufacturers to follow suit.
In the view of the CEO of China Mobile, the China Alliance, Face ID is the standout feature of Apple's latest devices. With under-display fingerprint technology still not fully mature, Face ID offers a more convenient alternative compared to Samsung's iris scanning. Additionally, while wireless charging has been used by Android vendors for some time, Apple’s leadership in this area is stronger than Samsung’s. However, whether it can be scaled effectively remains uncertain.
The Industry Is Evolving
In the development of consumer electronics, big companies not only lead with their technical expertise but also set trends through innovation.
With many smartphone manufacturers launching full-screen devices, the current under-display fingerprint solution is still not mature. As a result, Apple chose Face ID as an alternative. Industry experts are wondering if, once under-display fingerprinting becomes widely available next year, facial recognition will still be a viable option. Lao Pu suggests that the maturity and user experience of the technology will determine its future. Huang Yuxi also noted that Apple previously introduced Force Touch, but it wasn’t widely adopted. It was only when 3D Touch offered a better user experience that it gained traction.
The Black Tech Face ID, capable of unlocking even in the dark, relies heavily on the front-facing 3D camera of the iPhone 3 and the A11 chip’s powerful neural processing capabilities. According to Huang Yuanhao, founder and CEO of 3D sensor maker Aobi Zhongguang, 3D sensors are essential for functions like Face ID, recording, and animated expressions. They also have applications in gesture recognition, background blur, and game interaction.
As a result, the 3D sensing supply chain is gaining momentum. IQE, a UK-based company in Wales, may not be well known, but its stock price has tripled this year due to speculation that it produces laser diode chips for the iPhone’s 3D tracking technology.
According to TrendForce data from a state-level consultancy, the market value of 3D sensing modules in mobile terminals reached $1.5 billion in 2017 and is expected to grow to $14 billion by 2020, with a compound annual growth rate of 209%.
Aobi Zhongguang’s Financial Director Chen Bin told a reporter from 21st Century Business Herald that Apple acquired PrimeSense, a 3D somatosensory technology provider, in 2013 and now owns 3D sensor technology. Android vendors are now catching up. As the only domestic company with full intellectual property rights in consumer-grade 3D sensors, Aobi Zhongguang is currently collaborating with domestic Android manufacturers. According to him, the front camera mainly uses a structured light scheme, while the rear 3D camera doesn't necessarily need it. It could take one to two years before the technology matures.
Another major change was the iPhone 8, which finally supported wireless charging. Fang Shulong, the chief hardware officer of the company, told the 21st Century Business Herald that Apple’s charging strategy could potentially disrupt the charging industry. “If Apple moves toward long-distance wireless transmission like WiFi, it would be revolutionary for the industry,†he said. However, Apple chose the QI solution for short-range charging. While wireless charging is compatible, it hasn’t brought about a qualitative change yet, he added, and he is now paying attention to Apple’s fast-charging developments.
Due to the electromagnetic shielding caused by metal casings, wireless charging is not ideal. As wireless charging becomes more common, phone cases are expected to shift toward 3D glass and ceramics. Both the iPhone 8 series and the iPhone X use 3D glass back covers, signaling that the industry is already preparing for this shift. Domestic companies like Tongda Group, BYD Electronics, AAC Technologies, and Shengli Precision are all investing in 3D glass manufacturing. Equipment for glass processing, such as engraving and bending machines, is also expected to see a boom.
Made in China vs. Made in Korea
On September 8, news from Yonhap News Agency titled “Korean Manufacturer Decides to Hold iPhone 8 Price†sparked heated discussions among Korean netizens. Some claimed that the new iPhone should be made in Korea.
According to reports, a large portion of the NAND flash memory used in the iPhone 8 comes from Samsung Electronics, the world’s top supplier, and SK Hynix, the fourth-largest. In the OLED market, Samsung holds a 97% share. Most of the dual-camera components in the iPhone 8 are manufactured by LG Innotek, a subsidiary of South Korean electronics giant LG. The iPhone 8 also uses PCBs from Samsung and Korean SMEs. These core components account for a significant portion of the phone’s cost.
Apple sources parts from suppliers around the world, including China, with over 300 suppliers out of 700 total. For example, Lanstech and Bern Optical provide screen glass, Goer Acoustics supplies acoustic modules, Desai Battery and Innolux provide batteries, Jinlong Electromechanical provides linear motors, Huanxu Electronics provides WiFi modules, and Foxconn handles assembly.
However, most of these companies primarily supply peripheral components like waterproof parts, acoustic modules, motors, and housings, with relatively low added value.
Lao Pu, speaking to 21st Century Business Herald reporters, analyzed that the biggest change in the new iPhone’s supply chain is that Samsung now monopolizes the iPhone X’s OLED screen. In the current Apple supply chain, core components are mainly sourced from South Korea, where Korean companies are rising in prominence. Japanese firms have been declining, while Chinese companies are growing and gradually becoming more involved. Their role is expected to become even more important in the future.
Guo Mingchi, a renowned Apple analyst at KGI, previously stated that the higher price of the iPhone this year isn’t entirely Apple’s doing—it’s partly driven by its supply chain, especially Samsung.
Senior communication expert Xiang Ligang also shared his view, saying that with the release of the new iPhone, the industry’s leadership is shifting from Apple to Samsung. “Samsung is at the core of the entire mobile phone industry chain, from chipsets to memory to screens. Apple has strong brand appeal and high profits, but its influence is not as strong as Samsung’s. Apple is even more vulnerable to Samsung’s control. It seems that the delivery of the iPhone X will be difficult to guarantee in the future.â€
Of course, Apple is also working hard to strengthen its control over the supply chain. In the first half of the year, Imagination announced that it would integrate its own GPU into the latest A11 chip. This reflects Apple’s cooperation with Qualcomm and Intel, investment in panel manufacturer LGD, and acquisition of Toshiba. It is also making bets on emerging technologies like AR and artificial intelligence.
However, with the mobile phone market nearing its peak and the growing Android camp, it remains unclear whether Apple can maintain its innovation edge and continue to lead the industry in the next decade.
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