Jobs has had full supply line / vertical integration in mind for decades.
NeXT reflects his vision, down to raising a stunning amount of cash to build a factory for the hardware with NeXTs building NeXTs (circa 1986) - beautiful vid of that process http://www.youtube.com/watch?v=jhfUKEu7sJ0
There's a remarkable MacWorld keynote that I just wasted 15 mins trying to find where he lays out, blow-by-blow, his vision for returning to total vertical integration (posted years back) - anybody have that handy?
Say what you will about Apple, but if this is true, they are definitely putting their money where their mouth is with respect pushing progress in tech.
Apple has done a very good job of taking the technology others have created and building them into a product and marketing that product so people want it, but are they pushing for new tech?
They used touchscreens that others had developed. If the touchscreen wasn't available, would Apple have created it?
What is the 'cutting edge' technology in Apple products? I think it is mostly commodity components engineered into their products.
The difference with respect to choking the production lines is that when a manufacturer comes to Apple or Apple sources a product from them, they take almost all the stock meaning others can't get that product.
For example, the 10" screen on the ipad, from what I've heard, other manufacturers had a difficult time getting that size screen for a year. but is that really Apple pushing the progress in tech?
Someone more knowledgeable than I could shed some light on this possibly choking technology progress.
For instance, CES 2010 showed lots of tablets before Apple announced the iPad. It took a year for many of those products to get to market, and I believe part of that was due to the limited availability of the screens.
Is that Apple pushing innovation or slowing innovation as others are unable to develop products?
> For instance, CES 2010 showed lots of tablets before Apple announced the iPad. It took a year for many of those products to get to market, and I believe part of that was due to the limited availability of the screens.
There were a lot of products speculating what the iPad was going to be, but were no where near ready for mass production. Just because Apple (or any other company with tight lips) doesn't show you what they're working on until they ship doesn't mean they aren't ahead of the competition.
Apple doesn't announce products at CES. If you haven't noticed they don't even participate in these events anymore. A lot of product gets announced at CES, but most of it doesn't make it to market (especially amongst the smaller tech companies who use CES as a way to raise funding). The iPad was announced and shipped one month later. A lot of CES tablets were announced and shipped 6-9 months later.
The $499 price point was absolutely devastating to every other tablet maker because up to then they were assuming Apple would price it at $800-1000. Which meant they could price it at 600-800 and have comfortable margins. Their announcement one month after CES sent everyone scrambling back to the drawing board.
Except for the Archos, I can't remember a single tablet from CES 2010.
More than that, Apple does not announce products unless they have to (because they need developers to start working on it right now so everything's ready for release for instance).
I don't think Apple is directly behind these innovations, but they finance it and make things feasible at industrial scale.
Apple is basically doing what Wal-Mart did for the retail supply chain: they aren't sitting around waiting for their vendors to bring them product, they figure out what will sell and demand it from their suppliers, using their fantastic capital resources to make it a sure thing.
Apple tends to pre-pay manufacturers (of e.g. LCD screens, flash memory, etc) large sums in exchange for lower per-unit prices and first access to the supply chain. This results in Apple's part orders taking priority over everyone else's for a specified length of time.
There was a time, not too long ago, where every MP3 player manufacturer in the world had a hard time getting flash memory because Samsung, the world's largest manufacturer, was selling most of its supply to Apple. Thanks to the tendency of such large companies to operate each division as a separate business unit, this meant that even Samsung's portable phone and MP3 player division had a hard time getting flash memory.
In the end, prices went up for everyone except Apple, since the supply was severely depleted.
My understanding is that Apple has done the same thing for 10" 1024x768 LCD screens, resulting in a diminished worldwide supply (and, as a result, an increased price for anyone looking to purchase them).
May as well just go to the source and listen to Horace Dediu's podcast.
(slightly ranting tangent)
The "pros" can't make a working link nor can they link to the appropriate page. First link to 5by5 is broken and why link "5by5 networks" to 5by5.com/live? No good reason if you're at all familiar with the web. These people must be incompetent and I'm not using the word lightly. The writers who publish these articles should be able to link things properly. It's CNN, they just hire a dedicated link checker if nobody else is able to do it. Millions of ordinary people links things properly on their blogs every day but the people who do it for a living can't get it right.
Supposed professionals who blunder trivial and ordinary tasks ... sounds like material for TheDailyWTF.
They will have retina display iPads and computer monitors 2-3 years before any competitors can do it at similar scale or cost by paying the upfront capital for an ODM to build the factory.
And it's basically a proxy for having their own factory, which they directly control (classic Apple), but without their name tied to the negative aspects of it.
Sony and many other LCD projector makers have been making high pixel density LCDs since the 90s (think 1024x768 on an square inch). And there has been a smartphone out shortly before the iPhone 4's release date that had a 300+ dpi by some major manufacturer. LCD's major cost isn't pixel density, it's the size of the glass. The reason why they weren't released is because nobody was willing to buck the PC status quo of not having resolution independence (or doubling, like apple did it) since it would miniaturize everything to be irrelevant, making it not sell well. People who needed to see a lot of detail got specialized displays.
Plasma displays it's more the pixels, which is why large 720p plasmas are cheaper.
Samsung is also a huge company with south korean government backing, they can raise the capital to make whatever improvements apple contracts them out to do and make a shadow factory at the same time.
Ultra high res displays are extremely expensive - 4K monitors are over $10k. Apple will democratize them by having a better manufacturing process to make them a few hundred or less. Plus, i would bet Apple can bake in resolution independence into OSX far quicker than Redmond will.
Typical chicken/egg problem. They're over 10k because of low production runs and they're targeted towards industries that spend big, like the medical industry. If they were sold to the mass market then they would be close in price to your typical 32" LCD TV. Why are 16:9 ~21" 1080p screens so cheap, because they're parts from small LCD TVs! It's really the lack of demand that causes it. The sony LCD projector screen I quoted for example (it didn't have a backlight, it was just the lcd), you could purchase for around or under a $100.
Doesn't this article forget Samsung, who themselves manufacture a lot of the major components that make up a modern phone (display, flash memory, camera, etc).
I don't think this forgets Samsung, as in certain occasions Apple is buying so much product from Samsung that they are essentially buying up all the product from the factory.
I don't think the key is necessarily that Apple has invested in this factory or that one, but more that they have locked up the market so competitors can't get the same components.
If Samsung doesn't catch wind of the new component or can't study it until it's released to the public then Apple is still ahead until Samsung can duplicate the manufacturing process. They are good at copying but some things just take time, how long I'm not sure (but am curious if anyone here does know).
Samsung don't copy technology from from Apple, despite their designs being somewhat... inspired by them. They're up there with everyone else battling on the forefront of component development, e.g. bright colorful S-AMOLED displays, better camera sensors, etc.
However, I disagree completely with the statement that Apple's software is superior. Superior to what? Everything? No.
The user experience is excellent in the same manner that McDonald's is. McDonald's at one time provided an "innovative" customer experience, and so did Apple in 2007 with iOS. The McDonald's "UI" is not truly innovative or necessarily superior anymore, but it's always consistent. Same with iOS. Consistent, but not necessarily superior given all the choices.
Or the user experience is superior as in you bought a car that just works and you don't have to service. As opposed to, say, a kit-car that you can build yourself if you like cars that much, and you have much better control over.
Pretty much every company is perpetually suing every other company. If a company didn't exert all the legal advantages they can get, the other companies still will and you will end up at a disadvantage when you otherwise wouldn't be.
Apple is considered to be the most valuable company in the entire world right now. Not exactly a company that is an underdog.
Google isn't suing any competitors. Apple can see the writing on the wall, Android is beating them fair and square, no matter how much they supposedly overinvest in their supply chains (the touchscreen supply thing happened a couple years ago but for some reason people keep bringing it up) they are losing in the marketplace so they're bringing the courts into it. And of course their hype machine is in full drive.
By what metric? Phones activated? Apple doesn't care about having a large percentage of the market, as we have seen with OSX/ Macs over a long period of time. Each phone purchase/activation has far greater lifetime average profit than what Google get for each android activation.
Saying apple doesn't care about market share is ridiculous considering we're in the middle of a smartphone land grab. It's also ridiculous considering they're suing their competitors.
I don't buy it. Sure, Apple hasn't much cared for market dominance when it comes to MacOS, but it's not clear that they feel the same way about the mobile market at all.
Finally, his Rawr Chart (http://www.asymco.com/2011/05/18/the-rawr-chart/) shows profit per phone sold. The picture isn't pretty for non-iOS devices. It's not quite answering your question, as it doesn't break out Samsung's "feature" vs Android vs Bada (as an example), but the best example is HTC -- which appears to be just under $60 profit per phone (and IIRC HTC is mostly Android, isn't it) with less volume than Apple (which makes ~$275 per iPhone sold).
EDIT: small clarification. The Rawr chart doesn't break out handset maker profits by phone classification, so only Apple and RIM are the only ones who have profit for smartphones only, and maybe HTC. The others have diluted information because they sell more than just smartphones.
That is a great resource halostatue, and they do a great job of explaining the revenue per device figures for iOS.
Compared to this article http://aseidman.com/2010/05/65000-new-android-devices-ship-e... which estimates that each iOS/Android user is worth only $2.64/year/user. Though I'm not sure I trust the authors methodology, and that number seems extremely low.
Your right I don't have the figures and would be interested to see them myself. Generally search marketing is very much a volume thing, each user makes a small amount but having something like a billion users creates a lot of money overall.
With Apple they get a nice markup on the device itself and 30% every time you buy an app or take up a subscription.
Google isn't not suing because they're more noble or more intent on pure competition, but because they can't sue. They don't have a deep portfolio of patents. Simple as that.
With all due respect to the author, some editing is in order. The many grammar mistakes in the article make it hard to read. Most of it comes down to the fact that "Apple" is singular, not plural, but there are some general writing level issues there, as well.
It depends which country you're from. In North America we tend to refer to companies as singular, but this is not so common in the UK for example, where they're usually referred to as plural.
Despite the title feeling weird when I read it, it is actually pretty common to refer to companies as "they" in the US (see other comments in this very thread!) Which is really crazy; you end up with sentences like "Apple is smart; they are getting a huge competitive edge by doing this" where you refer to the company as singular and plural in the same sentence.
A few examples of the singular "they", courtesy of Wikipedia:
Eche of theym sholde ... make theymselfe redy. — Caxton, Sonnes of Aymon (c. 1489)
Arise; one knocks. / ... / Hark, how they knock! — Shakespeare, Romeo and Juliet (c. 1595)
'Tis meet that some more audience than a mother, since nature makes them partial, should o'erhear the speech. — Shakespeare, Hamlet
I would have everybody marry if they can do it properly. — Austen, Mansfield Park (1814)
That's always your way, Maim—always sailing in to help somebody before they're hurt. — Mark Twain, Adventures of Huckleberry Finn (1884)
Caesar: "No, Cleopatra. No man goes to battle to be killed." / Cleopatra: "But they do get killed". — Shaw, Caesar and Cleopatra (1901)
The singular "they" has extensive precedent. Some proscriptive grammarians feel that it should be disallowed, but given the usefulness of a neutral pronoun and the venerable history of the usage, I think they may be safely ignored.
I think that is a little bit misleading; I am fairly certain that there are plenty of examples of nonstandard usage in works by any of those authors that you would absolutely not accept as correct. Particularly Shakespeare, who is well known for using common parlance in his works rather than proper English.
That actually is grammatically incorrect in English even though it is used often in common parlance; they is supposed to only be plural. The correct usage would be "he or she" if you don't know the gender of someone; the reason why "they" is used so commonly for singular is because of how unwieldy it is to say "So about your friend; does he or she bring his or her ipod on his or her way to work?"
It's actually a huge flaw in English, and there has been tons of proposals of gender-indifferent singular pronouns like "xe". On the other hand, "you" used to only be plural and apply if you were talking to a group of people ("thee" was singular) and obviously the correct term today is you for both singular and plural.
It's easily possible that within the next 50 years it will be commonly accepted to use "they" as a singular pronoun in formal communication, but its not today. You would almost certainly be marked down for using it in that manner on the SAT or GRE for example.
That seems to be the way it's written everywhere in the british news. Using a company's name as plural doesn't appear to be too common even over there; I didn't come across any cases on three different sites.
Not to be grammar police, but either this guy is allergic to his "s" key or he thinks Apple is plural. The tile of the post, "But Apple make fewer acquisitions", "Apple over-invest in their supply chain", Apple pay a significant portion" makes me think that he thinks the plural for Apple is Apple.
Which is really intriguing in light of the Citizen's United court case and our general promotion of the concept of corporate personhood. That a corporation is its own entity rather than a representation of the interests and rights of the people who run it.
People keep saying that the Supreme Court ruled, in the Citizens United case, that corporations are people. No one has ever actually produced a quote from the court's opinion suggesting so.
In fact, the ruling was precisely that corporations are representations of the rights of their owners, and therefore conduits for their owners' exercise of free speech.
How cool, let's dump a bunch of downvotes on something because we disagree with one part of it.
The point was that it's interesting that American English treats a corporation as a single entity but British English treats it plurally (i.e. as a proxy for the people controlling it).
NeXT reflects his vision, down to raising a stunning amount of cash to build a factory for the hardware with NeXTs building NeXTs (circa 1986) - beautiful vid of that process http://www.youtube.com/watch?v=jhfUKEu7sJ0
There's a remarkable MacWorld keynote that I just wasted 15 mins trying to find where he lays out, blow-by-blow, his vision for returning to total vertical integration (posted years back) - anybody have that handy?