'Ultrabook' makers squeezed by Apple's control of metal chassis supply - Page 2

Halliburton! They're the known cause of all ill will in the world. I have it on authority.

The first is that Apple has at least three patents on uni-body construction. These are not vague software patents, but tangible design and manufacturing patents. It will be very difficult for competitors to side-step these. I fully expect for someone try, and I also fully expect Apple to let slip the dogs of patent war. Kudos to Apple for innovating here...they cracked the DNA of the ulta-book years ago, and will reap the benefit for at least 12 more.

Okay... let's try this again.

The part might be a difference of only $10 but then we have to turn around and look at Apple.

If you start adding all of the costs down the line for Apple then that $10 extra on the MBA becomes, according to the "pc manufacturer", an extra $100 at retail... so, theoretically, since the MBA costs $1000, then that pc would cost $900 at retail.

I'm saying that the "manufacturer" is pulling figures out of his ass and that $10 difference only translates into a $45 difference, and therefore, $955.

I think ARM is a threat for the thinner and lighter notebooks, especially when you consider Linux-based OSes, OS X (the umbrella of Mac OS and iOS) and Windows 8 will all run on ARM. I also think the threat isn't imminent from the desktop OS PoV this is the time when Intel needs to plan to keep that from happenings. Trying to sell more LV and ULV chips that can be used in ultra-light and ultra0thin notebooks is can benefit them in several ways.

+1 LOL.

A lathe and a mill are two very different machines, that serve very different functions. The original commenter was not being arrogant or prickish by pointing that out. However, your response to the comment certainly was. Chill dude.

Agreed.

Let's start discussing sarcasm again...

Could you elaborate on how that $10 "becomes" even $45 in savings? Would glue be cheaper to affix internal parts than screws, for instance?

Those machines in fact where build to Apple specifications, at least Foxcom ones. And also a unibody case if I remember well is a patented invention or process owned by Apple. The use of Liquid Metal is a unlimited one and is used for small parts inside most macs and mobile devices.

All these companies complaining about supplies and stuff are just paying the price of have incompetent CEO and poor planing. All Apple products are conceived in a way that they can earn the most out of them from the get go (manufacturing)

It would save the computer maker $20 not $10. $10 is the price Mitak pays before their process, as I read it. It doesn't say what the final cost is, just savings. Whatever the final cost to the computer maker they(hp or dell etc)may double it when they sell to retail suppliers. Retail may double that price. So if a part is $20 cheaper to Dell it's $40 cheaper to retail and $80 cheaper to consumer. Assuming keystone pricing all along the way which does seem out of line.

So um yeah. That was WAY over the top from your usual banter.

Anyway, it is interesting to see what the other PC makers are going to do. Especially because, as was commented upthread, they need to differentiate these from the classically under-powered, under-memoried, poor resolution screened netbooks that failed under the influence of the iPad. Intel has offered several reference designs over the years, including the low-powered netbooks. The PC makers have used them with varying success. And of course Intel doesn't help differentiate the processors because you have a huge range of performance characteristics in the chipsets (depending if they are true iCore or Celeron iCore technologies). So the average consumer sees "Intel Inside" and Core i3 or Core i5 and assumes that they are getting a steal on the latest chip tech, which actually only performances at 66% as the true i3 or i5. If the PC makers try the same thing in the Ultrabook benchmark - they will be seen as only fancy netbooks by most consumers.

You're right... that's the real stumper... how the manufacturer figures that Apple's process adds $80 onto the line...

Let's go with plan B... since it wasn't explained then we can only conclude that the manufacturer is pulling figures out of his ass.

Way over the top would be if I had made an ad hominem attack... get with the program if you're going to insult people.

It's a ratio of raw material cost to retail selling price markups. Typically consumer electronics will be a 4 to 1 ratio markup.

The problem is in that case there are design constraint. PC's beats Apple prices by using cheap and bulky "designless" containers with no power, size or weight limits.

This is why they cant beat apple in the tablet or air segment.

I did say that was my guess.

Pretty sure they are gonna have a major issue with heat dissipation. One of the great things about aluminum is its ability to transfer heat out of the system. Fiberglass acts almost as an insulator and these things are gonna have to have crazy vents in them or they are gonna bake!

No, it's not like that at all.

How about this: It's like reporting on a golf game and saying the golfer is swinging a bat. How a lathe and a mill make a part, and what kind of parts they can make, are very different, even if the technology behind both are similar.

If you're saying it's information that you don't care about, that's fine, but correcting wrong terminology is very different than getting your yardage within a third of a percent accuracy.

... 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>

It's because it's an "open" discussion instead of being a closed "walled garden".

</sarcasm>*

* tag inserted to prevent riling the spelling, grammar, and comprehension nazis.

I guess whoever wrote this used 'lathes' as a synonym for shape-cutting machining (as opposed to casting combined with screwing and glueing things together).

That's an interesting point, but I wonder how much the aluminum helps when none of the heat sources are thermally coupled with the shell like a chip and its heat sink. Keep in mind that most computers have a plastic shell.

They have a design patents on their particular case designs, but that would only cover the aesthetics - so it wouldn't stop somebody making a different looking unibody case. As for utility patents, a quick search turns up none assigned to Apple with 'unibody' or 'monocoque' in the abstract. It's quite possible that they have no patents on the manufacturing methods used and it's quite certain they have none on unibody construction in general since it had been around in automobiles and airframes for years.

So wait, this is Apple's fault that chassis vendors are operating at capacity and are unable to retool and increase production for other PC makes/models? Or maybe it's the consumer's fault for buying so many Apple products, forcing chassis manufacturers to meet consumer demand?

Personally, it seems that based on the OS most PC ultrabooks would be using, there's already a surplus of suitable alternatives: commode shaped white procelain.

Are you sure that they're not coupled in the MBP and MBA? That's actually one area where they do have a patent.

http://patft.uspto.gov/netacgi/nph-P...+AND+ABST/case

Wait no longer.

http://www.physorg.com/news167925273.html

But it is only transparent to UV, and only lasts a short time. Still cool though.

I'm waiting for Google to respond, saying that this is yet another example of Apple et al ganging up on them.

No, you have a contribution from Mr. I Don't Care about minute details that I feel are minutia. No one has to agree, I truly don't care. It's my opinion. I enjoy this website, but the ellitisism and extreme nerdism humors me at times.

Throw your arrows at me - great! You're all extremely intelligent, now are you happy? (too funny)

Have a good day. iPhone on 4G and retina iPad next year I hope, that's more important to me.


/audi 5000

Just saying it's white, shiney and water cooled. Least we forget that BG has been recently involved in their redesign. Perhaps he's on to something?!?!

All that minutia... like the difference between a drill and a saw, a bat and a golf club... hell, let's just start calling baseball "hockey"...

It is disingenuous to isolate the cost of a part then try to extrapolate the contribution to the retail price of the finished product. The COGS (Cost of Goods Sold) includes much more than parts: cost of money; manufacturing; distribution; warehousing; returns... to mention a few of the major ones.

It's been a while, but back in the late 1980s Apple provided its best retailers with a gross profit margin of about 20% -- For an Apple product the reseller sold for $100 he paid Apple $80 with net 30 day terms.

If you were agile, and consistent in your forecasts you could turn your inventory fast enough that you could make close to the 20%, less shipping, space for inventory, inventory handling costs (shipping, receiving, burn in, testing). Computers in those days were not very reliable out of the box.

Usually, though a reseller ended up sitting on a lot of inventory with bills to the manufacturer coming due. You could negotiate returns or delay forecasted/contracted shipments -- but there was shipping costs, a restocking fee and higher unit cost (lower margin) for not meeting your targets.

As you couldn't discount Apple products, many resellers would sell an Apple product at full price, packaged with software and accessories at severely discounted prices. Others would take loans from 3rd-parties to finance their inventory say at 3-5%.

So the reseller's Gross margin of 20% rapidly deteriorated -- the final costs being the 2-5% credit card fee when you sold the product. Any customer returns to the reseller were very costly over-and-above the normally cost structure.

In the days when there was a computer reseller on every corner, a good reseller was lucky to get 7-10% net margin on off-the-shelf products.

I suspect that's about what the Best Buys and Targets realize, today.

By comparison, a Safeway (or other) supermarket is doing a fantastic job if it can reach 1%, yes one percent net margin.

The above observations, admittedly, are dated -- and I've only discussed the direct product costs.

In today's world (using rounded numbers) Apple sells an iPad for $500 and pays roughly half that for parts. The completely manufactured and packaged iPad, likely costs Apple about $300.

Apple probably sells that iPad to resellers for $400 realizing about 30% plus gross margin on sales of its lowest margin iPad through 3rd-party resellers.

The more expensive iPads have higher margins and Apple direct sales through their stores increases the overall Apple gross margin for the iPad line to say, 40%.

So you do the calculations on what adding or removing a $10 part would do to the retail price -- all things considered.


BTW, some minutes ago AAPL market cap was within $14 Billion of XOM.

Actually the guy is right it is a mill. That said, we're not talking about great tolerances here. A Hurco or HAAS CNC machine could do the job and only about cost 50k to 70k -- and the market is flooded with them. Really, how hard could it be to find vendors?

Domestic Manufacturing had picked up recently with a lot the demand being just in time. Meaning that parts suppliers didn't have time to want for a container to ship from China. Add to that the recent issues with supplies from Japan and the market had picked up a bit. There are plenty vendors that could mill laptop case parts.

Not if they're Google...

Also look at the differences between GOOG and MSFT. Almost double the valuation of GOOG and over 50% greater than MSFT. New world order! I wouldn't be surprised if Coke and Pepsi start whining that Apple is buying up too much aluminum forcing them to spend more of cans for their sugar water.

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.

Imagine Intel being the impetus for Linux to take off. The number of developers that would flock to it would be amazing. Someone could create a program that would allow Linux to utilize the Thunderbolt port.

Many of the features in Leopard were already in Linux. The only thing Intel would need to do is ensure that there were drivers for all of the peripheral devices and all of the codecs for video were installed. Then their new Ultrabook computer standard would be competitive with the Apple laptops.

If the Linux community would throw some money at the Libre Office software and make it work as well as the Microsoft Office suite and also make it capable of reading and writing in the MS Office formats, Linux would expand greatly into the world. Intel would then have a big piece of the high end notebook market. It would protect itself from the loss of Apple's business should Apple switch to ARM processors or something else from it's own chip division.

Why don't HP and Dell realize they would have fewer customer service problems if they dropped Microsoft? The only real problems I've had with Linux were the lack of drivers present in the initial installation. I had to search for them and get help from forums with a few things. Major manufacturers could fix these shortcomings and bugs before shipping their hardware.

The downside of selling millions of Linux Ultrabooks is there would be more viruses created for Linux and the Linux community might need to start running anti-virus software.

Actually, I care, because I like to learn stuff. I read this site mostly for the "What's new?" factor as it applies to Apple. But I find myself engaged in these threads because people who know more than I do about a wide range of things share their knowledge.

Isn't that one of the main points of interacting with other people?

As usual, you have shown are a great researcher. Excellent find. I would have thought this concept had come from NeXT but it's clearly from Apple 5 years before Apple bought NeXT.

Abstract: A metal frame is fabricated from magnesium alloy and all the main components of the computer, including the logic board, the hard disk drive, the keyboard, the upper and lower halves of the computer's case, and the pivoting display screen are all directly attached to the frame. The frame thus offers a method for constructing a personal computer which will have greatly improved shock resistance, integrated electromagnetic isolation, and structural strength, without increasing the weight of the completed computer in any significant fashion. Additionally, by means of a cooling flange fabricated as part of the frame, the central processing unit of the portable computer is thermally connected to the frame, which then acts as a heat-sink for the central processing unit, greatly improving its reliability. Note the patent was filled in 1992 and refers to floppy disc drives in the full description. We've come a long way.

PS: I wonder if the inventors are still at Apple.

Thank You! I was wondering who wanted to make a round computer case.

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



... and be very easy to produce.

I could make a list of things Apple came out with that 'sheep copied' but I think everyone who regularly reads this blog knows them all. This is just one more example hence my exasperation.

That was my comment in the first post of this thread but I'm still waiting for the physicists to weigh in