Why Apple can make or break entire companies that depend on the iPhone

Suppliers and app developers who rely on the iPhone to survive are at the mercy of Apple.

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Apple is not the only company whose fate depends on the iPhone.

In this week’s episode of The iPhone Show, I talked about the recent shake-up caused by Apple’s efforts to own more of the iPhone’s supply chain. Watch the video above to learn more about what this could mean for other companies who depend on the iPhone to survive.

Earlier this month, the market value of two iPhone suppliers, Imagination Technologies and Dialog Semiconductor, saw a drastic downturn after it was revealed that Apple was ending their production contract. In the case of graphics chip-maker Imagination Technologies, its stocks went down by a whopping 60 percent.

It’s not only companies in the iPhone's supply chain that can be affected if Apple changes things up. CNBC created a list of companies that rely heavily on the success of the iPhone, and many of them were mobile game studios.

For example, Glu Mobile, the makers of the Kim Kardashian mobile game, makes over half its sales from iPhone users. Zynga and Gameloft also have a dangerous dependence on sales that come from iOS devices. If Apple were to change how the App Store works, or to increase the fees, then these companies could be in serious trouble.

What do you think of the iPhone economy? Is Apple doing the right thing to rely on fewer suppliers? And how can third-party iOS apps thrive in another company's ecosystem? Will Apple face a similar issue now that it's allegedly relying on Samsung to produce OLED displays for the forthcoming iPhone? Let us know by commenting on Macworld’s Facebook page and Twitter feed.

Previously on The iPhone Show: Why the iPhone 8 is going to be very much like Samsung’s new Galaxy S8

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