Suppliers have been forced to accept tough new terms to remain on shelves in Apple’s stores and website, despite mounting scrutiny of the iPhone maker’s market power.
Accessory makers have been asked to agree to slower payments and responsibility for unsold products, after Apple handed distribution for its retail network to a new provider.
The new terms mean sellers must wait as long as 60 days after an order is completed before they are paid, up from 45 days currently. They must also accept a so-called “consignment” model, in which they are paid only after an item is sold, rather than after it is received by Apple, shifting inventory costs to them.
Suppliers said previous terms were negotiated with distribution companies, while the new ones were set by Apple and not open to negotiation. While the deal ensures all suppliers face the same terms, vendors said they were unusual and put pressure on cash flow, but added few were likely to reject it, due to their dependence on sales via Apple.
The iPhone maker has more than 500 stores around the world, as well as its website. It stocks items from dozens of third-party manufacturers, such as cases, chargers and smart home gadgets. Being selected to sell in an Apple store is seen as a major endorsement of a brand.
The squeeze comes with Apple under increasing scrutiny of its business tactics. Competition watchdogs on both sides of the Atlantic are focused on Silicon Valley’s biggest companies.
Last year, gadget maker Tile complained to US and EU authorities that Apple used its retail operation to squeeze potential rivals.
Apple’s retail network has grown significantly in recent years, making up around $93bn (£68bn) – some 34pc of its total sales – during its last financial year, compared to 25pc four years earlier.