Japan manufacturers said to gear up for Apple and iPhone 6

Machine tool and component makers in Japan are seeing brisk orders as components for the next-generation iPhone go into production. But Japanese suppliers are also looking beyond Apple.

Brooke Crothers Former CNET contributor
Brooke Crothers writes about mobile computer systems, including laptops, tablets, smartphones: how they define the computing experience and the hardware that makes them tick. He has served as an editor at large at CNET News and a contributing reporter to The New York Times' Bits and Technology sections. His interest in things small began when living in Tokyo in a very small apartment for a very long time.
Brooke Crothers
2 min read

Manufacturers are getting ready to make a 5.5-inch Apple device. Apple/Screenshot by Brooke Crothers/CNET

Activity at Japan-based machine tool manufacturers and component suppliers is brisk for the next-generation iPhone. But it's not all good news, according to Japan's Nikkei business daily.

Domestic orders for industries connected to the next-gen iPhone are "booming," Nikkei said in the online Japanese-language version of the daily.

Orders from China for machine tools are at a "high level" as select Chinese component makers for the next iPhone have begun mass production, the report said.

Specifically, orders for machine tools bound for China jumped 7.5 times compared to a year ago, accounting for 15 percent of all orders received by Japanese manufacturers, "thanks to demand created by the new iPhone model," Nikkei said.

While not all machine tool orders are necessarily for the so-called iPhone 6, orders related to specific Apple procurement -- aka the "Apple ecosystem" -- are a big factor in driving the orders, according to Nikkei.

And it's not just machine tools. Orders are increasing at Japan-based suppliers for iPhone-related parts such as ceramic capacitors and optical image stabilization-related components.

The boom in orders is tempered by a fear of over-reliance on Apple, however.

Sales of Apple devices after the iPhone 4S have been "muted" relative to prior generations, and Apple's total global share of smartphones has fallen since 2013, Nikkei said.

One precision machine tool supplier, for example, says that the special Apple-related "procurement" is expected to fall off sharply in a few months, which will impact profits.

Component makers too are looking to diversify away from Apple, as low-cost phone makers like Huawei and Xiaomi begin to gain prominence, Nikkei said.

LCD display maker Sharp, for instance, is in negotiations with more than 10 smartphone makers in China.

Finally, the report mentions that a large-screen 5.5-inch Apple device is being readied, citing industry sources. (That's in addition to the rumored 4.7-inch model, which Nikkei discussed in an earlier report but not in today's.)

In related news, a report today at MacRumors repeated a persistent rumor that the 5.5-inch iPhone 6 will be available only in limited quantities initially because of, in part, its use of a display cover made from sapphire, which is not available in large quantities yet.

Update: AnEnglish-language version of the story is now available at the Nikkei Asian Review.