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'Ultrabook' makers squeezed by Apple's control of metal chassis supply - Page 4

post #121 of 157
Quote:
Originally Posted by Woodlink View Post

Year or two....funny.

In "tech years", a year or two equates to something like a decade.

Correct. However, they have had an 18 month ramp up window to acquire more resources, instead of hoping to stifle supply from Apple who already had the contracts.
post #122 of 157
Quote:
Originally Posted by Tulkas View Post

Even then, it wasn't due to being "a master of the supply chain". The 1.8's were very new when they decided to go with it and they were really the only ones using them in large quantities initially. Today, Apple is able to control supply chain dynamics for pretty much almost any component, regardless of how established the supply chain is. Once Apple comes in and says "mine" it is pretty much a kick in the nuts for competitors to try to get supply.

Having said that, Cook has been an absolute genius in getting operations like supply management running like silk.

Though I don't have any evidence to back it up() I have the impression much of their supply chain control is from similar situations like the 1.8 drives. apple sees an opportunity with a technology and commits to large orders to get a good price. When the 1.8s were new no one including apple was using them in large quantities( by definition ). Apple takes a risk(build it and they will come) by commiting to a large order and often it has payed off for them. Everyone else sees the success and goes knocking on doors to get similar components but finds that there isn't any extra capacity immediately.
I'm not sure I understand the distinction between your first and last sentence
post #123 of 157
[QUOTE=Curmudgeon; Under normal markup, the part that costs $10 less would simply make the retail cost $10 less. [/QUOTE]
That's not normal markup. What your describing is actually no markup at all. Markup is the price going up at each stage of manufacturing ,distributing, and retail sale.
post #124 of 157
This looks like a first-mover advantage for Apple. Because they stuck with the ultraportable concept and kept refining it, getting it right last year and perfecting it this year, they are ahead of the game.

Perhaps the "Ultrabook" makers need to be a little less wedded to the idea of making carbon copies of the MacBook Air and just making nice ultraportables. The Samsung Series 9 and Sony Vaio Z are two good examples of PCs that don't try to copy the MacBook Air, but instead seek out their own niches.

From Intel's perspective, while they have really pushed the Ultrabook concept, in the end, does it really matter to them whether they sell a Sandy Bridge or Ivy Bridge processor to ASUS or HP rather than Apple? As long as there is demand from the MacBook Air crowd, isn't a sale a sale?
post #125 of 157
Quote:
Originally Posted by solipsism View Post

This thread has gone down hill in record time. I blame the Nazis.

Agreed. Hitler has put cranky dust in the water.
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post #126 of 157
Quote:
Originally Posted by akhomerun View Post

I'm sorry, but until iPods and iPhones propelled Apple into a dominant market position for said devices, Apple was NOT AT ALL known for being a master of the supply chain!! I don't know who counts ~5-7 years as "long"

If you buy in bulk and have a lot of cash that's pretty much all it takes to become a "master of the supply chain for overseas components"

In the 1980s, Apple had a sophisticated JIT manufacturing plant in Fremont CA:

http://www.facebook.com/pages/Fremon...5098570?v=info

It was state-of-the-art for manufacturing and supply chain management,''
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post #127 of 157
Quote:
Originally Posted by Curmudgeon View Post

Sorry, but it doesn't help. I think you're reading me or the article backwards. We're not talking about how $10 can add $100 to the price. Instead, we're talking about a savings of $10. A negative number. If something costs $10 less to make at wholesale, how does it end up being $100 less at retail? This is multiples of subtraction. Under normal markup, the part that costs $10 less would simply make the retail cost $10 less. How does it make it $100 less? The fiberglass case being thrown in for free? Is there is some inherent manufacturing technique with fiberglass that saves money over manufacturing with aluminum.

One component of pricing a product is to mark up the product costs based on forecasted sales.


With a low forecast, the markup will generally be higher to meet profit objectives.

Let's assume, that our product with a milled metal case has a total parts cost of $200.

Now, to meet the profit objective for the product, the the company marks it up 400%: parts cost $200 + $800 markup == $1,000 Selling price.


So now, the company decides to use a fiberglass case reducing the parts cost by $20 ($10 x 2).

Our new calculation is: parts cost $180 + $720 markup == $900 Selling price.

Voila! $1000 - $900 == $100 savings.

Admittedly, this is a simplistic example. But many companies will use this as an initial approach -- then test their markup formulae/assumptions
by calculating details -- cost of money, inventory, plant and equipment, handling, manufacturing, warehousing, distribution, sales, G&A... and profit.


I must add that pricing/forecasting is a black art.

When IBM introduced the Selectric "Golf Ball" typewriter in the 1960s it was priced at about $320.

The story was that IBM forecast that they could meet their profit objective with a price of $160.

The IBM board said: "Double it!"

It was a resounding success!

http://en.wikipedia.org/wiki/IBM_Selectric_typewriter


Edit:

Finally, the masters of this black art like Apple and Tim Cook -- likely start the process in reverse with a price and profit objective. Then they focus on the details which will allow them to meet these goals with the resources and risk they want to commit.

Then, they continuously monitor/sample and refine the details to assure they attain their goals as the market changes. Certain things are weighted differently than others -- sex (market appeal), integration with other plans, competition, opportunity, etc.

For example, Apple may choose to use an A5 chip in the iPhone 5 where the A4 would be adequate -- by increasing the use of the A5, Apple gains sex appeal, can reduce the A5 cost and apply that to increased margin on the iPad -- or the ability to reduce the iPad price to stave off competition.
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post #128 of 157
Quote:
Originally Posted by JONOROM View Post

+1

and what input method would they use to put out the fires from excessive heat?

Urine a lot of trouble if you have to ask that...
post #129 of 157
Quote:
Originally Posted by island hermit View Post

WTF?!?! PC notebooks are trying to compete with Apple price points (and can't)?! At what point did the tables turn and where the fuck have I been?!!

The tables turned a long time ago, except people were still brainwashed into thinking that Macs were more expensive than generic PCs.
post #130 of 157
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post #131 of 157
Quote:
Originally Posted by Doctor David View Post

Though I don't have any evidence to back it up() I have the impression much of their supply chain control is from similar situations like the 1.8 drives. apple sees an opportunity with a technology and commits to large orders to get a good price. When the 1.8s were new no one including apple was using them in large quantities( by definition ). Apple takes a risk(build it and they will come) by commiting to a large order and often it has payed off for them. Everyone else sees the success and goes knocking on doors to get similar components but finds that there isn't any extra capacity immediately.
I'm not sure I understand the distinction between your first and last sentence

The distinction is that Cook, regardless of his genius, was not responsible for the 1.8 choice. That was Rubinstein. Cook perfected their supply chain management, but is a fairly recent phenomenon. He's only been COO since 2007 though he was SVP for a few year before. Describing them as long time 'masters of supply chain management' is a bit of a stretch.

Today, yes they can bet big on a new component, process or vendor and control the market. The difference between the 1.8" drives and today is that Apple was able to 'control' that market only because no one else was using them. Today they can disrupt global supplies for any component or part regardless of how well established the market is. They can take the most common components, like memory, and make th scarce. They didn't have that sort of influence 10 years ago.

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post #132 of 157
With all of the mentions of fiberglass, I haven't seen any comments on fiberglass' durability over time. From the automotive industry, my experience with fiberglass has usually been pretty poor, with products warping/cracking over time and paint spidering. I've also noticed that it tends to be very difficult to get a nice smooth finish on fiberglass (as mentioned previously), which seems easier to do on aluminum. Not that anyone makes dropping their laptop a habit, but I also believe aluminum handles that impact better than fiberglass.

with respect to carbon fiber: as far as I know it, carbon fiber has always been a rigid material, while steel and aluminum are "benders." seems to me that aluminum is better for this application, but I haven't followed this vein of manufacturing for a while, so my knowledge may be out of date.
post #133 of 157
Quote:
Originally Posted by benjaminm3 View Post

With all of the mentions of fiberglass, I haven't seen any comments on fiberglass' durability over time. From the automotive industry, my experience with fiberglass has usually been pretty poor, with products warping/cracking over time and paint spidering. I've also noticed that it tends to be very difficult to get a nice smooth finish on fiberglass (as mentioned previously), which seems easier to do on aluminum. Not that anyone makes dropping their laptop a habit, but I also believe aluminum handles that impact better than fiberglass.

You do raise a good point, but cars are used a lot longer than computers, in terms of replacement cycle, 5 years for a computer is akin to 15 years on a car. I think most cars experience a far greater range of temperature ranges than computers.

Quote:
with respect to carbon fiber: as far as I know it, carbon fiber has always been a rigid material, while steel and aluminum are "benders." seems to me that aluminum is better for this application, but I haven't followed this vein of manufacturing for a while, so my knowledge may be out of date.

As I understand it, thin sheet carbon fiber is more flexible than similar thickness of sheet metal. You get your rigidity in curves and bends.

As it is, both materials seem implausible for very thin computers.
post #134 of 157
Quote:
Originally Posted by island hermit View Post

WTF?!?! PC notebooks are trying to compete with Apple price points (and can't)?! At what point did the tables turn and where the fuck have I been?!!

Its all in the name, kind hermit. You have been on an island!
post #135 of 157
Quote:
Originally Posted by Curmudgeon View Post

Sorry, but it doesn't help. I think you're reading me or the article backwards. We're not talking about how $10 can add $100 to the price. Instead, we're talking about a savings of $10. A negative number. If something costs $10 less to make at wholesale, how does it end up being $100 less at retail? This is multiples of subtraction. Under normal markup, the part that costs $10 less would simply make the retail cost $10 less. How does it make it $100 less? The fiberglass case being thrown in for free? Is there is some inherent manufacturing technique with fiberglass that saves money over manufacturing with aluminum.

The way I understand it is: If we had to get the chassis done in mag-aluminium, we will charge $100 more for the laptop. If we use fibreglass, it will be cheaper than metal, so we will throw the customer a bone and not charge them $100 more.
post #136 of 157
Quote:
Originally Posted by Tulkas View Post

The distinction is that Cook, regardless of his genius, was not responsible for the 1.8 choice. That was Rubinstein. Cook perfected their supply chain management, but is a fairly recent phenomenon. He's only been COO since 2007 though he was SVP for a few year before. Describing them as long time 'masters of supply chain management' is a bit of a stretch.

Today, yes they can bet big on a new component, process or vendor and control the market. The difference between the 1.8" drives and today is that Apple was able to 'control' that market only because no one else was using them. Today they can disrupt global supplies for any component or part regardless of how well established the market is. They can take the most common components, like memory, and make th scarce. They didn't have that sort of influence 10 years ago.

Ok I think I see what you're saying. I thought you were contradicting yourself in your first and last sentence but you're saying that their skill in the supply chain has been a progression over the years.
I guess what I was talking about (now that i'm thinking more about it) isn't about the supply chain at all but the way apple designs. What parts are available in quantity and making something that sells so well that those quantities are unavailable when others come knocking. Wasn't there an excess of memory on the market 4years or so ago? I guess the difference you're pointing to is that they didn't cause shortages of components like the 1.8 drive (I don't think). Now of course they are not only buying up all there is but possibly helping finance expansion of some suppliers.
This post of mine could have been shorter if I had simply typed "I agree".
post #137 of 157
Carbon Fibre is not, to my knowledge, something that can be recycled in any meaningful way.

http://www.apple.com/environment/#recycling

Apple clearly want to continue to improve their existing performance in this area, as all manufacturers will have to given the inexorable price rise of raw materials, so I can't imagine them ditching the aluminium any time soon now that they have latched on to it.
post #138 of 157
Quote:
Originally Posted by Dick Applebaum View Post

Actually, I suspect that a laptop case shaped like this would be great!



... and be very easy to produce.

And after a full day of reports/photos/hacking/whatever, you could take your laptop out for a round of Ultimate Frisbee!
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post #139 of 157
Apple, in addition to gaining advantages by setting up long-term purchase contracts with suppliers for key components, also have been reported as direclt partnering with fabricators to set-up the plants, with the result that Apple gets x numbers of years of exclusive production from the plant, after which they simply get preferencial handling and the plant is opened up to supply other interests as well.
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post #140 of 157
Quote:
Originally Posted by fecklesstechguy View Post

Apple, in addition to gaining advantages by setting up long-term purchase contracts with suppliers for key components, also have been reported as direclt partnering with fabricators to set-up the plants, with the result that Apple gets x numbers of years of exclusive production from the plant, after which they simply get preferencial handling and the plant is opened up to supply other interests as well.

Yes. I think they've been doing that at least as far back as the 30" Cinema display. From what I gather, Apple paid a good chunk of money to LG to help them build the factory that makes the panel for the 30", and it was exclusive to them for maybe a year. I think Apple and Compaq kicked in money to Pioneer to make the first of some kind of DVD drive (I forget which kind) and it was exclusive to those two companies for a little bit, so it's a practice that has some precedence. So it's not like Apple is necessarily squeezing the supply, they often help make supply available by financing the means to produce more.
post #141 of 157
I'm not sure why these reports indicate that Intel is pushing the ultra book standard in competition to Apple - since Apple is probably one of Intel's largest customers!

Doesn't make sense that Intel would be pushing it - I can understand if multiple Windows PC manufacturers are, but is Intel really pushing?

I mean this article finally mentioned "Intel and its partner PC makers" but it still seems silly to me. Is there any reference where Intel itself is actively involved?
post #142 of 157
Quote:
Originally Posted by island hermit View Post

WTF?!?! PC notebooks are trying to compete with Apple price points (and can't)?! At what point did the tables turn and where the fuck have I been?!!

This is nothing new. PC manufacturers have NEVER been able to successfully compete with Apple where Apple is - the whole "7" tablet is better" debacle is the most recent example of this.

What people confuse is, Apple does not try to be all things to all people. They have specific and narrow product lines.

PC manufacturers are all over the place. They produce everything from Netbooks to bargain basement PC's that practically fall apart when you touch them up through ultra-high end workstations.

So people will take a bargain basement PC and try to compare it to a Mac Pro and then proclaim "Apple is overly expensive!" - which, if the Mac Pro is the only thing that meets their needs might be effectively true - but what is more accurate is Apple is overpriced for that person since they don't offer the same specs and quality machine they need, not that when similarly match they are overpriced.

This has been born out over and over again - when compared feature for feature, Apple is always right there or often beating their competitors. Sure, you might be willing to accept a thicker, heaver notebook with worse battery life - Apple just doesn't offer those.

We are witnessing the real squeeze right now - as what were previously luxury categories trend downward naturally, Apple is going to be there dominating and sucking the proverbial oxygen out of the room. This is happening with the iPad, and now it's happening with the MacBook Air. It's been that way with most of the MacBook Pro line, but people have been so used to accepting less that it doesn't stand out from the crowd of normal Notebooks. But like the iPad, the MacBook Air is so unique and essentially a new category, the differences between them and all other offerings is very obvious.
post #143 of 157
Oh yeah - nothing screams quality like fiberglass!

Maybe they can fake carbon fibre it....
post #144 of 157
Quote:
Originally Posted by OriginalG View Post

I'm trying to understand why such a large gap exists when they could make $20 off a $399 regular netbook, but can't accept similar margins on high-end netbook just to undercut Apple. Is there something else that's significantly different?

If you don't see the difference between a bargain basement netbook that has ultra-cheap components and severe compromises in CPU, Video, RAM and storage as well as low resolution displays and a MacBook Air... well, I doubt there is much we could do to enlighten you.

You are talking two totally different classes of machines with radically different design philosophies and performance characteristics.

There's a reason, especially in the face of the iPad, Netbook sales have tanked and hit manufacturers like Acer that were depending on high volumes of their sales really hard.
post #145 of 157
Quote:
Originally Posted by Smallwheels View Post

If Intel wants to create an Ultrabook with similar dimensions and specifications to Apple notebooks and can't do it with a similar price, it has a choice. It can choose to create notebooks with Linux. It isn't free for manufacturers but it is way cheaper than Windows. Doing this would make the Ultrabooks price competitive with the Apple notebooks.

Typically to sell a product you have to make a product that people want

If that sounds harsh, I can't help it - it's the truth. There is still zero demand from end users in general for Linux. That's a fact and no amount of pushing is going to change that. When Linux distributions are easy to use and support the applications that people want to use then they will take off.

And as for Applications, if a Linux pusher really wanted to solve the application problem they need to fashion a Linux distro with the equivalent of the Lion launch pad and tie into one of the Android stores for Honeycomb/tablets. Not ideal but better than the goose egg that is the average persons view of useful software on Linux.

Yes, I realize there are tons of people happily using Linux - you just need to acknowledge that they are about as far from the mainstream as you can get and therefore irrelevant to the discussion. Indeed, even Mac OSX and Windows are way more complicated and involved than the vast majority of "normal" people want. People want tools to accomplish things, not technology or computers - this concept is VERY hard for geeks or tech oriented people to understand because for us using technology is fun in and of itself.

We are a minority.

You need to keep reminding yourself of that.

It's why, especially as Apple polishes iOS and with iCloud de-emphasizes the importance of the PC in the overall experience, that iOS usage is going to take off again. iOS represents what most people want - easy to use solutions in a user-friendly and non-technical format. Tools. Appliances. Whatever you want to call them - they are friendly, immediately useful and don't require people to conform to them in order for useful work to be done.

And no, Apple isn't worried about cannibalizing the Mac. Because they fully intend to no longer be dependent on the Mac for their revenue - they are moving onto the next big thing: iOS. They are skating to where the puck will be!

And no, it also doesn't mean Apple is going to abandon Mac OSX either. It's still a vital part of their overall scheme. But unlike Microsoft, Apple is secure enough to de-emphasize one product line when another is poised to eclipse it. Just look at the confused message from Microsoft when it comes to Tablets. They are paralyzed and unable to act boldly. They are sticking with the same strategy (windows everywhere!) that has worked so well for them for the past 10 years - yeah, that's brilliant!
post #146 of 157
Quote:
Originally Posted by solipsism View Post

Note the patent was filled in 1992 and refers to floppy disc drives in the full description. We've come a long way.

Jobs was at it with the Apple III - the power supply was integrated into the case for thermal reasons. There was no fan! Unfortunately the power supply technology at the time wasn't good enough and they often overheated. Passive cooling just wasn't good enough!

One of many design failures of the Apple III and amazingly similar to this.
post #147 of 157
Quote:
Originally Posted by Galbi View Post

Fiberglass is used in many applications in the boating industry. Durability has already been proven.

Durability for a hull and durability or other characteristics for notebooks are another thing entirely.

If it's so ideal, why is it their "fall back" solution?!?

Quote:
Heat dissipation is a none issue as notebooks these days dont produce as much heat as they used to.

Really? My work windows computer has a plastic case and the fan on it is constantly going. My Aluminum MacBook Pro gets warm, but the fan only kicks in when I'm doing really CPU intensive stuff. Heat dissipation is huge! Not only is fan noise annoying, fans dramatically lower battery life.

Please don't try to make this as an "advantage" - it's no more an advantage than 7" screens for iPad competitors were.
post #148 of 157
Quote:
Originally Posted by wizard69 View Post

Yep! With a little effort they could have a high volume line up in a year or two .



And exactly how much experience do you have in high volume low margin product manufacturing?

If it was so easy everyone would be doing it and Apple wouldn't be beating the pants off of everyone else. Your assertions just don't make sense.
post #149 of 157
Quote:
Originally Posted by solipsism View Post

This thread has gone down hill in record time ...

yes.

when i read you comment i, at first didn't believe it, but then i re-read the second post in this thread. you're absolutely correctly; the thread went down hill in record time indeed. what amazes me is the article didn't reference Sony, Samsung or Google. one can only conclude that some Apple fanatics are defensive by nature and, in some queer sense of rationalisation, see it fit to still hold grudges against non-Apple manufacturers in the home computing market.

anyways, in a world where supply chains were not constrained (due to reasons mentioned in the original post) i wonder how well Apple would be doing in the market.
post #150 of 157
Quote:
Originally Posted by emacs72 View Post

anyways, in a world where supply chains were not constrained (due to reasons mentioned in the original post) i wonder how well Apple would be doing in the market.

lol - Apple's success isn't because their competitors supply chains are constrained....
post #151 of 157
Quote:
Originally Posted by DocNo42 View Post

I'm not sure why these reports indicate that Intel is pushing the ultra book standard in competition to Apple - since Apple is probably one of Intel's largest customers!

Doesn't make sense that Intel would be pushing it - I can understand if multiple Windows PC manufacturers are, but is Intel really pushing?

I mean this article finally mentioned "Intel and its partner PC makers" but it still seems silly to me. Is there any reference where Intel itself is actively involved?

Maybe this?

http://www.intel.com/content/www/us/...ultrabook.html

http://blogs.intel.com/technology/20...mputing_is.php

Also, one of the previous AI articles link to an Engadget article showing a presentation slide and press release by Intel

I think Intel has made system reference designs in the past, I don't see where to get that kind of information, it might still be NDA or exclusive with large computer makers. It better be a lot farther along than alleged chassis supply issues to hit the Holiday 2011 goal shown in the first Intel page. I've not worked on a project of anywhere nearly the complexity of a computer, but I expect that redesigning the shell & chassis in August for mass production in October/November for sale by Black Friday is unrealistic at best. Even simple looking molds and dies can have a 12 week lead time.
post #152 of 157
Quote:
Originally Posted by Tulkas View Post

They can take the most common components, like memory, and make th scarce. They didn't have that sort of influence 10 years ago.

Erm no, they can't. They're the biggest single buyer of NAND but still only 30% of the market, they aren't making it scarce in any meaningful way. They have a good lock on the large multi-touch screen systems required for tablets, but that's because until recently nobody was using them.
post #153 of 157
Quote:
Originally Posted by emacs72 View Post

what amazes me is the article didn't reference Sony, Samsung or Google.

Why would an article about ultrabooks reference google? Why would it even reference Samsung? Only one of those three that makes sense is Sony since the Vaio range has included some premium ultraportables, though how comparable they are to the Air in terms of power or build quality is questionable.
post #154 of 157
Quote:
Originally Posted by cloudgazer View Post

Erm no, they can't. They're the biggest single buyer of NAND but still only 30% of the market, they aren't making it scarce in any meaningful way. They have a good lock on the large multi-touch screen systems required for tablets, but that's because until recently nobody was using them.

Hmm. I know in 2009, when Samsung and Micron were telling their module customers their supply of NAND was going to be 1/2 (or in microns case 0) for certain months, it was widely attributed to Apple locking up supply. Maybe you know better.

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post #155 of 157
Quote:
Originally Posted by Tulkas View Post

Hmm. I know in 2009, when Samsung and Micron were telling their module customers their supply of NAND was going to be 1/2 (or in microns case 0) for certain months, it was widely attributed to Apple locking up supply. Maybe you know better.

That's just two of half a dozen or so major NAND chip suppliers, how about the others?
post #156 of 157
Quote:
Originally Posted by island hermit View Post

... and I'm extremely happy about that. Odd, though, that we don't have some pc blowhards entering this thread explaining how much better the $1300 pc is compared to the "crappy" $999 MBA. I guess those days are gone... <tear in eye>

Suuure... because we all know MBA is best for everything one can demand from one's computer
post #157 of 157
Quote:
Originally Posted by nikon133 View Post

Suuure... because we all know MBA is best for everything one can demand from one's computer

I'm pretty sure the MBA can do anything an Ultrabook can do, which is the subject of this article. To assume it means any $1300 PC would likely be taking the comment out of context.
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