BOM

Apple’s new MFi game controller program offers a lot of promise for gaming on iOS— the top mobile gaming platform around could also soon be a serious platform for hardcore gamers. But the first crop of controllers have been met with much criticism from developers, reviewers and consumers alike. The consensus so far: flimsy buttons and joysticks, lack of support from developers, and a $99 price tag make them far overpriced compared to your standard Bluetooth game controller.

The launch for the first few controllers to hit the market was rushed, developers are disappointed and still trying to catch up, and manufacturers are limited in pricing, features, and quality due to Apple’s MFi program requirements. What does Apple have to do to overcome a rocky start to its game controller program which is supposed to control quality? And how are manufacturers limited by Apple in building better controllers at a fair price? We’ve dug into Apple’s MFi program and talked to developers and companies building the controllers to find out…
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A report from Digitimes claims that, although touch panel orders from the iPhone and iPad 2 have increased significantly for the third quarter, Apple is allegedly placing orders at nearly half the cost of previous shipments. This leads us to believe they are either trying to reduce BOM (and increase margins) at the expense of suppliers, or they’re prepping for the usual price cuts in the wake of new product releases (iPhone 5, we’re looking at you).

The report notes:

Wintek has received touch sensor orders from Apple at prices nearly 50% lower than the ones previously offered by the client. The impact of Wintek’s low-margins is expected to ripple out to other downstream players

The move is expected to result in lower than usual profit-margins for the supplier and also affect other suppliers down the chain. The report is also quick to point out that “Wintek has previously rejected low-margin orders from Apple”.  We’ll keep you posted as more becomes available.