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'Ultrabook' makers squeezed by Apple's control of metal chassis supply - Page 3

post #81 of 157
Quote:
Originally Posted by cloudgazer View Post

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.

You pique my interest enough to do a quick search.
http://www.appleinsider.com/articles...ok_design.html

"Two years after Apple introduced its first unibody computer in the MacBook Air, the company has officially been granted ownership of its unique design and manufacturing process."

Sounds like more than aesthetics to me and instead includes the actual design and process. I guess the machinery involved might be used for designs and processes that don't violate Apple's patents.

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post #82 of 157
Quote:
Originally Posted by Curmudgeon View Post

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

OK, do you not understand that things are marked up in percentages?

Let's say Apple goes to Foxconn and says "How much to make a thing of wood vs plastic?"

Foxconn figures "we can buy wood for $20, but plastic only costs us $10. It costs us $10 in labour to make it either way, making it $30 for our cost to make it out of wood, or $20 to make it out of plastic. We'll add in our standard profit margin and quote Apple $45 for the wood, and $30 for plastic."

Apple says "great, so when we apply our profit margin, we'll sell a wood one for $60 or a plastic one for $40."

So I made up the profit margins and I turned $10 into $20. We didn't even talk about markup for retail and distributors. Add those in, and it could easily be $45.

It's not like they start with a base price and carry the save savings throughout - the market up is applied at each step. So if Foxconn found they could build it out of paper for $5, then don't just take $5 off their price to Apple, and Apple doesn't just take $5 off their price. They still apply their standard percentage markup to the $15 price (parts + labour), and so does Apple, and then they do it for distribution, and retail.
post #83 of 157
Quote:
Originally Posted by Tulkas View Post

You pique my interest enough to do a quick search.
http://www.appleinsider.com/articles...ok_design.html

"Two years after Apple introduced its first unibody computer in the MacBook Air, the company has officially been granted ownership of its unique design and manufacturing process."

Sounds like more than aesthetics to me and instead includes the actual design and process. I guess the machinery involved might be used for designs and processes that don't violate Apple's patents.

Nope, but the bad Appleinsider reporting could easily lead you into believing it. The key passage in that article is this

' Two entitled "Portable computer" show the design of the MacBook Air, while one, called "Electronic device," apply to Apple's larger, more powerful aluminum MacBook Pro.'

The clue is in the name. Patent titles are required to be descriptive, if the patents were for manufacturing techniques then they wouldn't be titled 'portable computer', however - that's EXACTLY what the design patents would be titled.

This search shows all of Apple's patents with that title, note that all the ones titled just 'Portable Computer' all begin with a D. Any patent starting thus is a design patent and is thus limited to aesthetics.

http://patft.uspto.gov/netacgi/nph-P...ELD2=TI&d=PTXT

There are some utility patents with similar names in the list, but none of them relate to unibody construction.
post #84 of 157
Quote:
Originally Posted by 80025 View Post

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 porcelain.

+1

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

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post #85 of 157
Quote:
Originally Posted by digitalclips View Post

Yet another example of sheep having to copy Apple! Jeez will it ever end? Good luck with heat dissipation with fiberglass not to mention durability and the look and feel. BTW this reminds me, I wonder what happened to Apple's Liquid Glass venture?

Fiberglass is used in many applications in the boating industry. Durability has already been proven. Heat dissipation is a none issue as notebooks these days dont produce as much heat as they used to.

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post #86 of 157
Quote:
Originally Posted by digitalclips View Post

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

If they do fiberglass then they'll also need to do some sort of interior metal chassis to hold the various parts, and to act as a heat sink, then attach the case to the chassis.

This, in turn, means that it could be tough to do a really thin and light case that's strong enough.

It also means, parts and price-wise, that you have to manufacture not only the case, but the chassis as well, then assemble them both. Each part runs up the price and the cost of assembly. Though a stamped metal chassis isn't nearly as expensive as a CNC milled part.

Another point to consider is whether or not people will pay "Air" prices for a fiberglass notebook. It will probably be lighter, true, but I doubt it will have the fine fit and finish of the existing Air.
post #87 of 157
Quote:
Originally Posted by cloudgazer View Post

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

The teardowns of the actual machines don't show evidence of a thermal coupling. I think it would be clever to do so, but maybe there's a drawback that's not obvious.
post #88 of 157
Quote:
Originally Posted by solipsism View Post

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

I blame the hills.
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post #89 of 157
More humorous news... For you anti-Apple folks, because it's selling sooo well </sarcasm>, this weekend only you can get the HP Touchpad tablet for $100 off.

http://www.hp.com/offer
post #90 of 157
Quote:
Originally Posted by Dick Applebaum View Post

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.

I don't think it's disingenuous, It's like a rule of thumb, don't hold onto it like it's a law of physics or rule of law.
post #91 of 157
There are probably 10,000 shops in NY that could mill such a case. Now high volume production might be a different issue but I find it absurd that these people can't find a machine shop to at least get started. A build out of a high volume line is a different story, but you wouldn't do that until you have a successful product.


Quote:
Originally Posted by Elastic Reason View Post

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?

This is why I think the story is bogus. Milling machines are dime a dozen and can be had quickly on the used market and even from "inventory". These would not be lines suitable for high speed production but they could certainly handle light production with enough hands.
Quote:
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.

Yep! With a little effort they could have a high volume line up in a year or two .
post #92 of 157
Quote:
Originally Posted by ahmlco View Post

If they do fiberglass then they'll also need to do some sort of interior metal chassis to hold the various parts, and to act as a heat sink, then attach the case to the chassis.

Quote:
Originally Posted by JONOROM View Post

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

Quote:
Originally Posted by Galbi View Post

Fiberglass is used in many applications in the boating industry. Durability has already been proven. Heat dissipation is a none issue as notebooks these days dont produce as much heat as they used to.

Computers have had plastic shells and metal chassis for a long time. More expensive computers had metal shells for a long time (IBM/Lenovo Thinkpads, more expensive Compaqs, Macs from TiBook on, etc.), but I've not seen one that use the metal shell as a heat sink. There is some heat dissipation through the shell but I really doubt it's a significant percentage.
post #93 of 157
Anybody has an idea what environmental impact fiberglass or carbon fiber would have if widely used for computer case making.

I see a danger that (toxic) electronic components are embedded into the fiber shells during production when the resin is still not hardened, making it thinner, but making separating of the components nearly impossible.
post #94 of 157
Quote:
Originally Posted by wizard69 View Post

There are probably 10,000 shops in NY that could mill such a case. Now high volume production might be a different issue but I find it absurd that these people can't find a machine shop to at least get started. A build out of a high volume line is a different story, but you wouldn't do that until you have a successful product.

I think the bigger issue isn't that they can't find a shop to mill precision chassises in bulk, but that they can't afford the cost of milling precision chassises.
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post #95 of 157
Quote:
Originally Posted by bsimpsen View Post

I've been wondering this too. One of the claimed benefits of the Liquid Metal technology was the ability to injection mold it to final tolerance, complete with an attractive surface finish. Apple has an exclusive license on this technology in the CE space. If it works and works well, it would be yet another distinguishing characteristic of Apple products that's hard to copy.

Per their agreement, liquidmetal has until 08/2012 to meet specific benchmarks. By the time other companies can get ahold of aluminum lathes, Apple may start moving on to superior differentiating technology. ie: Liquidmetal blowmolding.
post #96 of 157
Quote:
Originally Posted by cloudgazer View Post

Nope, but the bad Appleinsider reporting could easily lead you into believing it. The key passage in that article is this

' Two entitled "Portable computer" show the design of the MacBook Air, while one, called "Electronic device," apply to Apple's larger, more powerful aluminum MacBook Pro.'

The clue is in the name. Patent titles are required to be descriptive, if the patents were for manufacturing techniques then they wouldn't be titled 'portable computer', however - that's EXACTLY what the design patents would be titled.

This search shows all of Apple's patents with that title, note that all the ones titled just 'Portable Computer' all begin with a D. Any patent starting thus is a design patent and is thus limited to aesthetics.

http://patft.uspto.gov/netacgi/nph-P...ELD2=TI&d=PTXT

There are some utility patents with similar names in the list, but none of them relate to unibody construction.

ok, gotcha.

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post #97 of 157
Quote:
Originally Posted by JeffDM View Post

Computers have had plastic shells and metal chassis for a long time. More expensive computers had metal shells for a long time (IBM/Lenovo Thinkpads, more expensive Compaqs, Macs from TiBook on, etc.), but I've not seen one that use the metal shell as a heat sink. There is some heat dissipation through the shell but I really doubt it's a significant percentage.

For the TiBook, your lap was the heat sink -- and it raised your voice 1/2 an octave
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post #98 of 157
Quote:
Originally Posted by ahmlco View Post

If they do fiberglass then they'll also need to do some sort of interior metal chassis to hold the various parts, and to act as a heat sink, then attach the case to the chassis.

This, in turn, means that it could be tough to do a really thin and light case that's strong enough.

It also means, parts and price-wise, that you have to manufacture not only the case, but the chassis as well, then assemble them both. Each part runs up the price and the cost of assembly. Though a stamped metal chassis isn't nearly as expensive as a CNC milled part.

Another point to consider is whether or not people will pay "Air" prices for a fiberglass notebook. It will probably be lighter, true, but I doubt it will have the fine fit and finish of the existing Air.

It does sound like a bad idea start to finish doesn't it? I have this mental image of what many a low cost fiberglass boat looks like after a few years in the sun and a few dings ...
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post #99 of 157
Quote:
Originally Posted by wizard69 View Post

There are probably 10,000 shops in NY that could mill such a case. Now high volume production might be a different issue but I find it absurd that these people can't find a machine shop to at least get started. A build out of a high volume line is a different story, but you wouldn't do that until you have a successful product.



This is why I think the story is bogus. Milling machines are dime a dozen and can be had quickly on the used market and even from "inventory". These would not be lines suitable for high speed production but they could certainly handle light production with enough hands.


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

Your first paragraph probably well describes their problem. It takes balls the size Apple has to set up a massive and cost effective high volume production this way. The sales of PCs in general are not indicating this is a good risk for the PC makers I suspect. Perhaps they'd all have to get together to compete with Apple. Then again for the likely sales volume a few shops in NY would probably surface! haha
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post #100 of 157
Quote:
Originally Posted by mesomorphicman View Post

Do you feel better now? Flexed your knowledge now you can continue your smarter than you complex. People like you humor me, comment has no real opinion on the article, just a need to be extra particular. Reminds me of Mike Tirico (not that you know who he is as I'm sure sports are beneath your IQ), if someone says the ball went 301yards he'll correct them and say actually it went 302 - who the hell cares it's in the general area. Lastly, speaking of tools, you are one.

/ghost

I originally wrote:
Quote:
Actually, it's 'CNC mill', not lathe, but carry on...

Somehow those nine words have triggered quite a response from you, including a psychological assessment and an ad hominem attack. My intent was to clarify a term that, while not vital to the article, nonetheless was repeated three times to describe one facet of Apple's manufacturing process. It's not that big of a deal, on par with mistaking 'food processor' with 'blender'. But for anyone who wishes to learn more about case manufacturing the distinction is important.

So how should I have worded my correction so as to not provoke your ire?
post #101 of 157
A new Italian sports car made by Lamborghini will have part of the chassis and body made from a new process to create carbon fiber parts. The parts will be injection molded instead of laying up layers of weave on top of one another and adding resin to bond them.

This process could be utilized by laptop makers to quickly create very strong shells for their computers and not need milling machines. It would be much faster to make parts using injection molding technology than milling huge chunks of aluminum. The parts would be just as light or even lighter than aluminum.
post #102 of 157
Quote:
Originally Posted by Smallwheels View Post

A new Italian sports car made by Lamborghini will have part of the chassis and body made from a new process to create carbon fiber parts. The parts will be injection molded instead of laying up layers of weave on top of one another and adding resin to bond them.

This process could be utilized by laptop makers to quickly create very strong shells for their computers and not need milling machines. It would be much faster to make parts using injection molding technology than milling huge chunks of aluminum. The parts would be just as light or even lighter than aluminum.

Maybe Lamborghini can help the PC makers design the cooling system?
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post #103 of 157
Quote:
Originally Posted by solipsism View Post

This thread has gone down hill in record time. .

Your ID:

Join Date: Apr 2006

Posts: 23,754;

that's @ 63 months; Your posts divided by 63 and then divided by 30 days = 12.568 a day. An average of @ 12 A DAY.

I assume you read all of the other threads and posts before you post.

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post #104 of 157
Quote:
Originally Posted by Dlux View Post

My intent was to clarify a term that, while not vital to the article, nonetheless was repeated three times to describe one facet of Apple's manufacturing process.

I was glad you did, as I didn't know the difference, nor really care, but once you pointed it out, I looked it up. And now I know a tiny bit more than I did when I woke up, which is a good thing to me. So, thanks.
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post #105 of 157
Quote:
Originally Posted by Curmudgeon View Post

"A segment of fiberglass is said to be between $5 and $10 cheaper than a magnesium-aluminum one, and an entire notebook could see $20 in savings on the production end with the use of fiberglass. That could equate to savings of $50 to $100 at retail, according to Taiwan fiberglass maker Mitak Precision."

I'm most definitely not a business man. So how does this work? How does $5 to $10 turn into $50 to $100?

I looked around the thread and I didn't see anyone directly address your primary question: How can a $10 part equate to a $100 increase in cost. I'm not going to discuss the end price, but I can assure you that a part that arrives at your incoming dock that you pay $10 for will end up costing you more than $10.

First, someone has to pick it up, log it in as received (this also incurs IT costs...). Then it's moved to some storage location (after some kind of inspection to make sure it's what you ordered and not some shipping clerk's left over pizza and that it is painted the right color, has the right lettering, and, actually works). Even if automated conveyers, that location is most likely inside a building. The part is taking up real estate in that building and it's taking up environmental conditioning of the storage area. As long as that part sits on that real estate, it's adding cost.

As an aside, Apple is the, or one of the, grand masters in "Just in Time" manufacturing. This means that incoming raw materials spend as little time as possible taking up real estate.

When the assembly line is ready (again, that determination incurs costs some human, some IT) for the part then it's moved again. These are direct costs and controllable by smart management and design.

Now, what no one has talked about is the activity leading up to ordering that part. If it's a transformer for the power supply, it almost certainly isn't an off the shelf part. It most likely was designed by an Apple engineer. The design was shopped around. Bids were received and evaluated. Sample parts were made. And again, these parts were received and again evaluated before being released to procurement and production. I knew an engineer in Apple's QA department some years ago and he told me that Apple was the biggest stickler for quality he'd ever worked for. These are indirect costs. And, again are controllable by clever management and processes.

Lastly, every part in the finished product is subject to failure. Some value has to be added to the part to cover costs related to diagnosis and replacement. This is a big one. Every time an Apple person has to look at your computer and diagnose it, the costs start piling up. So, the goal is to build in quality so you never have to bring it back and have a physical part replaced.

So, does this make a $10 part add $100 to the price. I can't say for each part there is a 10:1 mark up, but I can assure you, a $10 part adds far more than $10 to the cost of using it.

I hope this helps.
post #106 of 157
Quote:
Long known as a master of the supply chain for overseas components, Apple...

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"
post #107 of 157
Quote:
Originally Posted by acslater017 View Post

When PCs can slap together components for cheap, they are cheaper. Any old desktop with a plastic tower can go $300...

But when things like new technology, new designs, new manufacturing methods, design overhead come into play, Apple is very competitive. See iPad prices or "ultrabook" prices... Apple spent 5 years working on iPad and probably at least a few years working on MacBook Air (it debuted in 2008).

So now everyone else is trying to play catch up, but they haven't made the designs, secured the suppliers, secured the machinery, etc.

I guess another take on this is that if Apple wanted to sell a cheap plastic tower, they could probably do so competitively now (and probably with higher margins than other OEMs because they don't have to pay for Windows). I'm not sure they could have done that 5 years ago -- certainly not 10 years ago. That's a very interesting change. I guess it still might not make sense to do it, just because it would cannibalize some portion of their more expensive Macs and ultimately it would diminish the brand. But it's just another measure of how far they've come.
post #108 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"

Actually I think it started with the very first iPods, I seem to recall reading somewhere of Apple tying up the supply of 1.8inch hard drives from early on.
post #109 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"

Quote:
Originally Posted by cloudgazer View Post

Actually I think it started with the very first iPods, I seem to recall reading somewhere of Apple tying up the supply of 1.8inch hard drives from early on.

Good points.

Ergo, Apple was merely a supply chain grasshopper and only graduated to master status when the white ear buds started pervading our society.
post #110 of 157
Quote:
Originally Posted by cloudgazer View Post

Actually I think it started with the very first iPods, I seem to recall reading somewhere of Apple tying up the supply of 1.8inch hard drives from early on.

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.

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post #111 of 157
Quote:
Originally Posted by Smallwheels View Post

A new Italian sports car made by Lamborghini will have part of the chassis and body made from a new process to create carbon fiber parts. The parts will be injection molded instead of laying up layers of weave on top of one another and adding resin to bond them.

This process could be utilized by laptop makers to quickly create very strong shells for their computers and not need milling machines. It would be much faster to make parts using injection molding technology than milling huge chunks of aluminum. The parts would be just as light or even lighter than aluminum.

Thats very true. The downside is that the parts look like sh%t! The look is like carbon fibre gone bad.
It's called forged composite. Here is a golf club made by the process. This process is cheaper then regular carbon fibre but is not cheap.


If any one is interested here is a short article explaining how it works.
http://www.carbonfibergear.com/what-...-carbon-fiber/
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post #112 of 157
Yes, even if there's an established supply chain for a particular component, Apple is calling the shots. They don't need to corner the market, however they can buy up enough where their competitors are squabbling over crumbs, usually at a much higher price than Apple's negotiated volume discounted pricing.

Also, Apple is leveraging its cash hoard by making some substantial down payments. No one else is getting NAND flash memory at Apple's prices.

Tim Cook is indeed a supply chain genius.
post #113 of 157
One of the most amazing things about the Macbook Air is the metal chassis. Replacing this with fiberglass, which will have nowhere near the solidity or the rigidity will take a *lot* of the ultra out of the Ultrabooks.

Fail.
post #114 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 available in banana-walnut, cinnamon, and mango-pineapple
post #115 of 157
Quote:
Originally Posted by Dlux View Post

Actually, it's 'CNC mill', not lathe, but carry on...

True, but I find it odd that with such demand for these systems the manufacturer of these custom CNC milling machines isn't ramping up production for more units.

You cannot tell me that PC manufacturers won't invest in them.
post #116 of 157
Quote:
Originally Posted by sequitur View Post

Your ID:

Join Date: Apr 2006

Posts: 23,754;

that's @ 63 months; Your posts divided by 63 and then divided by 30 days = 12.568 a day. An average of @ 12 A DAY.

I assume you read all of the other threads and posts before you post.

I am in awe of your dedication to AI. I joined a month before you, and I have posted a mere 1,503. I feel humble in your presence. This is NOT a criticism or sarcasm. I am truly in awe of your abilities.

Do you ever sleep?

But it is only his conscious mind that exists here
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post #117 of 157
Quote:
Originally Posted by wizard69 View Post

There are probably 10,000 shops in NY that could mill such a case. Now high volume production might be a different issue but I find it absurd that these people can't find a machine shop to at least get started. A build out of a high volume line is a different story, but you wouldn't do that until you have a successful product.



This is why I think the story is bogus. Milling machines are dime a dozen and can be had quickly on the used market and even from "inventory". These would not be lines suitable for high speed production but they could certainly handle light production with enough hands.


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


Year or two....funny.

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

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   I am long on my shares of AAPL at $37.00

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post #118 of 157
Quote:
Originally Posted by Dlux View Post

I originally wrote:


Somehow those nine words have triggered quite a response from you, including a psychological assessment and an ad hominem attack. My intent was to clarify a term that, while not vital to the article, nonetheless was repeated three times to describe one facet of Apple's manufacturing process. It's not that big of a deal, on par with mistaking 'food processor' with 'blender'. But for anyone who wishes to learn more about case manufacturing the distinction is important.

So how should I have worded my correction so as to not provoke your ire?

Now you're using a calm voice and logic. That's sure to set him off again.
post #119 of 157
Quote:
Originally Posted by noirdesir View Post

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).

I suppose he could just as easily have used the word drill or a crowbar as a synonym. It would have been equally correct.
post #120 of 157
Quote:
Originally Posted by jm6032 View Post

I looked around the thread and I didn't see anyone directly address your primary question: How can a $10 part equate to a $100 increase in cost. I'm not going to discuss the end price, but I can assure you that a part that arrives at your incoming dock that you pay $10 for will end up costing you more than $10.

First, someone has to pick it up, log it in as received (this also incurs IT costs...). Then it's moved to some storage location (after some kind of inspection to make sure it's what you ordered and not some shipping clerk's left over pizza and that it is painted the right color, has the right lettering, and, actually works). Even if automated conveyers, that location is most likely inside a building. The part is taking up real estate in that building and it's taking up environmental conditioning of the storage area. As long as that part sits on that real estate, it's adding cost.

As an aside, Apple is the, or one of the, grand masters in "Just in Time" manufacturing. This means that incoming raw materials spend as little time as possible taking up real estate.

When the assembly line is ready (again, that determination incurs costs some human, some IT) for the part then it's moved again. These are direct costs and controllable by smart management and design.

Now, what no one has talked about is the activity leading up to ordering that part. If it's a transformer for the power supply, it almost certainly isn't an off the shelf part. It most likely was designed by an Apple engineer. The design was shopped around. Bids were received and evaluated. Sample parts were made. And again, these parts were received and again evaluated before being released to procurement and production. I knew an engineer in Apple's QA department some years ago and he told me that Apple was the biggest stickler for quality he'd ever worked for. These are indirect costs. And, again are controllable by clever management and processes.

Lastly, every part in the finished product is subject to failure. Some value has to be added to the part to cover costs related to diagnosis and replacement. This is a big one. Every time an Apple person has to look at your computer and diagnose it, the costs start piling up. So, the goal is to build in quality so you never have to bring it back and have a physical part replaced.

So, does this make a $10 part add $100 to the price. I can't say for each part there is a 10:1 mark up, but I can assure you, a $10 part adds far more than $10 to the cost of using it.

I hope this helps.

Quote:
A segment of fiberglass is said to be between $5 and $10 cheaper than a magnesium-aluminum one, and an entire notebook could see $20 in savings on the production end with the use of fiberglass. That could equate to savings of $50 to $100 at retail, according to Taiwan fiberglass maker Mitak Precision.

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.
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