PC makers struggle as Apple locks up metal chassis supply - Page 2

When you heard Steve talk, it was often about leaving the competition so far behind that they could not catch up. Apple, operationally, is intensely focused on that in terms of process and the means by which those objectives benefit from massive piles of cash and profit. Buffett mentioned that Steve always only wanted the cash

http://www.cnbc.com/id/46540227/Warren_Buffett_Steve_Jobs_Didn_t_Take_My_Advice_to_Buy_Back_Apple_Stock-this is mainly why.

 

Now, the also-rans are jumping on the CNC train and won't be able to effectively enter that supply chain for at least three years (if at all). Apple already bringing on line the next step in its chassis production process. I recall a story about a Liquidmetal exec (or former exec or engineer) commenting on how Apple would not be ready to use that material and process on a massive scale for at least 3-5 years. That sounds about right to me. They have been investing in and refining this new process since, what, 2010? And Apple recently renewed their exclusive CE license for another 2 years. By 2015 their FOUR YEAR investment will allow them to leave Wintel OEMs that many years behind. Even if an exclusive licensing agreement fails to be renewed in a couple years, they'll already hold patents for using Liquidmetal in extremely efficient, cost-effective, and proprietary fabrication processes. 

I never said it was unfair. I think it is absolutely brilliant. The other producers can copy Apple's look and style, but they can't copy the efficiency and thus the price. The reason is the other companies don't have the commitment. You can't dip a toe in the unibody water and expect to compete with Apple who is all in and doubled down on their unibody assembly line.

I wish this obsession with slim would pass. I carry my laptop in bags that are so thick, even another inch in thickness hardly matters. What I'd really like to see is are 11" and 13" MacBook Airs with iPad-like battery lives, perhaps even 12-15 hours.

I was going to counteract what you were saying JR, but you've redeemed yourself with this post.  :)

When the unibody chassis came out, everyone ridiculed it.  The iHating trolls and whiners are unusually absent on this subject after they crucified Apple for wanting to waste money and aluminum on carving out cases from a block of metal.  As usual, they were proven wrong on an epic level and the competitors are now complaining of constraints?? Screw them.  Apple bought the machines for their suppliers and it now seems that the other players want to just hitch a ride on everything that Apple built for their own stuff?  Whiners to the max.

Sure, there are countless of smaller shops that can make them, the problem I think is that there are no shops really where one can walk in and say "Build me 10 million chassis' in three months".  That's the problem.  Not Apple's problem thankfully, because they were looking years down the road instead of the quarter-to-quarter like everyone else.

Sucks to be them.  They only have themselves to blame.

I, too, would like a longer lasting battery an I'm willing to sacrifice some CPU and GPU capacity, and storage capacity for it but there is a limit. I think Apple does a good job here even if they are thinner than I would personally prefer.

Sure, bags have to bigger than the things we carry within them until such time as we see TARDIS Inside stickers on our cases. Add in the needed cushioning for protection and it gets even thicker and heavier but this woud be even more dramatic with a larger and heavier machine.

That said, my computer bags are considerably smaller and lighter than they use to be. Mostly from a reduction size and weight but Apple has furthered this with sturdier chassis, integrated components and solid state components that are allowing our bags to become less bulky.

I completely disagree. I never have a time when the MBA's battery life (5-7 hours) would be a limitation. Even on a flight to Europe, by the time you get settled and have something to eat, the battery will get you the whole way there. I travel over 100,000 miles per year and avery inch or pound I can save in my carry on bag is appreciated.

Considering that the fastest growing segment in laptops is the ultra book/MBA segment, lots of people seem to agree with me. And for those who don't, you can still get an MBP with better battery life. If that's not good enough, you can presumably get an external battery (at least you could on previous MacBooks, so I assume you can do it now, as well).

I was doing fine in the weight department until the iPad came out. I needed the MBP but wanted to take the iPad as well so I ended up lugging even more weight.

 

Or you know, 60,000

 

http://www.census.gov/econ/industry/hierarchy/i332710.htm

 

Of course, of those 60,000, how many of them have the right kind of machines or the capacity to do what Apple wants done?

That's an erroneous assumption. Just because something is popular does not in any way make it perfect or ideal, it just means it's perceived as a better for that other products.

Most notebooks sold are cheap as notebooks that font come close to any battery like of a Mac notebook. By your logic one could have said less than a decade ago that people don't want notebooks because desktops are selling just fine.

I want more battery life and trust Apple to supply it when it's feasible. I expect next year's iPad to likely increase by at least 10%

Especially the fire suppression system!

I hope people read your post and grasp what you are saying. A few points though, the machines aren't "prototyping" CNC machines, these are full bore production machines.
Actually the CNC machine itself can be fairly cheap it is the building of the entire production line that ups the price. Of course not seeing the "line" it is hard to nail down a figure but full bore production lines can easily run into millions if you factor in development costs. This is what people on this forum don't understand, CNC equipment is readily available. Setting up a production line does take some time and effort though. it amazes me that people read the various article about Apple investments with their contractors and can't grasp the idea that Apple owns the hardware the products are built on. They aren't the worlds production lines they are Apples.
It isn't unfair at all and is a bit like expecting GM to build motors for Ford. The fact that PC companies can't afford to buy production lines like this is really a comment on the state of the PC industry. By the way, while the machines are relatively cheap, setting up the production line does take considerable time and effort. So while Apple may have been doing Unibody for 4 years now, actual R&D on the line probably started 6 years ago.

This is the other thing with Unibody, it requires an engineering effort that many PC builders simply don't have. There was a rumor at one time that Apple had (maybe still has) a line set up in California where these R&D took place to establish the production line. This wouldn't surprise me one bit as I've seen companies do similar things with development work here in the US.

Sorry, I never made any such assumption. Where did I say it was perfect or ideal? I simply stated that it was relatively popular because it was selling well. That is most certainly a warranted conclusion.

The fact is that you have a choice of laptops from Apple - the MBA or the MBP (actually two versions of the MBP). Complaining that the MBA is too thin and light is foolish. That's what it's designed for. If you don't want thin and light, then buy one of the MBPs.

Essentially, complaining that the MBA is too thin and light is like complaining that the GMC Sierra 1500 doesn't have enough hauling capacity. That's what the 2500 and 3500 are for.

You just demonstrated an inability to read for content!!!!

Apple has locked nothing up, they own their production lines. Letting a PC manufacture use these lines would amount to the same thing as Maytag allowing GE to build washing machines with their equipment.

Nothing is locked up here at all, all that is required is for the PC manufactures to spend some cash to develop like processes. The fact that many builders can't, due to the economic status of the PC industry, is an indication of the poor state of the PC industry not a sign that Apple has things locked up.

I'd expect that getting line one up cost Apple several million dollars. This is most likely why Intel had to set up a cash fund to even get PC manufactures to think about ultra Books. It isn't the actual machinery that is the problem but rather the development effort to get everything working productively. It is a huge hurdle and the PC manufactures most likely don't have the ability to govern a development effort that might take two years or more.

Hopefully with the coming election Eric Holder will find himself in jail for some of the things they tried while in power.

Those numbers are underestimated. Look at the methodology:
http://www.census.gov/econ/census07/www/methodology/sources_of_the_data.html

Unless you're doing business with the government, small firms would be vastly underrepresented.

In any event, the point is made - there are tens of thousands of machine shops in the US alone. Based on my experience with machine shops, I would venture that at least 10% could handle Apple's case - and probably a lot more than that. So there are many thousands of places that could do it. Or, the competitors could simply choose one or two and help them to improve their capabilities as Apple did.

 

This is only barely on topic (except that Apple products rock). 

 

Our 2008 Unibody still looks brand new after 3 years of light daily use (after a wipe down with a paper towel and some cleaner that is).

 

Our battery is in so-so condition after 3 years, like yours, TheOtherGeoff.

 

We recently upgraded our RAM from 2GB to 4GB for the whopping investment of......$27US.  Nice.

 

After using MonoLingual to remove extraneous languages etc etc and other speed-up things (like deleting 2000+ e-mail messages), it's back in great shape (for Web & E-mail).

 

It will run Mountain Lion (barely, whew!).

So early 2013?  128GB SSD for less than $100 (it should happen by then).  Then it will be a MacBook Air, and last ANOTHER few years.

 

Maybe a battery from NewerTech sometime in there.

_________

 

Last Thing:  When we sold our 2005 White iBook G4 in 2009, it was for $475, the price of a new DELL Laptop.

 

Here's a Maxim:  When you're ready to "throw out" an Apple product (through selling it), that's when it's worth the same as a new Windows-Box.

I have years of experience in manufacturing in the optics industry, thus I can say this either the supplier is competent or they aren't. Given a proper engineering drawing the contractor either has the ability to fabricate the part or he doesn't. There is no middle ground here.
Baloney! Seriously guy you are out of your speciality here. I once worked on a line that held tolerance on a part to a couple of microns. That was 24 hour shifts seven days a week with cycle times under ten seconds. Expensive yes, maintenance consuming yes but impossible no. It is still a garbage arguement! PC manufactures are completely free to set up, invest really, in their own production lines. There is a repeated theme that there is a shortage of CNC equipment to do this which is completely bogus. The availability of CNC equipment is not the problem and never has been, that is why the articles are bogus. All it takes is a manufacture willing to invest the capital to put the line into a building. pC manufactures apparently assume that the contractors will do this, the contractors though most likely don't want to take the risk. More so if a contractor does take the risk the product will be far more expensive than a similar item coming off Apples line.
The problem with many industries is that they end up controlled by bad actors on Wall Street. Many a company has been ruined trying to appease major shareholders. I've seen this first hand and really it isn't pretty when every move a company makes is focused on numbers for the next quarter. The one good thing about Steve Jobs was that he didn't give a damn about these bozos. This may have had the side effect of keeping Apple stock rather cheap for years but it also keep investors away that didn't have a clue. In this regards there are good and there are very evil investors, in effect owners, you really don't want your company owned by the evil ones.

 

 

I remember the issue Apple had to overcome to mill the chassis for the MBP and MBA and it involved a much finer machine than was being produced for the machine sops you are referring to. The machines were an order or two beyond the usual milling machines in some respects that I don't quite remember. If what you're thinking was true then Apple wouldn't have drained the world supply of milling machines and flown them to the factories in a big toot. 

 

Some other posters on this thread are also confusing the production of laptops with ultrabooks. The ultrabooks require the unibody construction to instill the required rigidity into the thinner lighter case because there is less structure to do so, as it a typical laptop. There is no shortage of cases for the typical laptop.

Retina MBP maybe?

Touché

I doubt that include captive shops within other facilities.
There are differing levels of capacity to meet a customers needs. Some shops are literally one man operations with little excess capacity and at times highly specialized. Other shops can process whole sub assemblies in a mass production manner and effectively act as a subcontractor. One does have to shop around a bit.

In any event I think people mis important points here. It isn't the availability of machinery that is the problem, it is the unwillingness to invest in the machinery that is the problem.

Excellent.

I really don't know what you are talking about here. The Unibody chassis isn't really a high tolerance item. Apple might keep tight tolerances relative to the rest of the laptop industry but that doesn't mean their tolerances are unusual. You don't remember because it is or was a fantasy. This has never been the case. CNC milling machines are plentiful and in fact have enjoyed a proliferation of sorts as computer technology has been leveraged in the comtrollers. It is actually very feasible to put a CNC machine in your basement these days.

In any event it isn't the CNC machine that is the problem, it is rather the interaction of the production line and the specialized machinery to make mass production possible that takes time and money.
Even this is bogus. There are other materials that laptops can be molded from that would be perfectly OK in an Ultra Book. Mold a chassis out of Ultem ( an engineering resin ) and it will be plenty strong and likely plenty expensive.

The big problem with Ultra Books, in the PC world, is that nobody was willing to finance their development. Thus the pleading with Intel for cash to get the ball rolling.

Thank you for saving me the trouble of typing out a detailed response. Obviously, a lot of people don't mind babbling about manufacturing issues when they don't have a clue.

I do, however, disagree with your comment about the assembly line. While that can be true for some components, I'm not sure it applies here. Labor is cheap and most or all of the machining can be done with a single process. So they need a laborer to load the block into the CNC and hit the 'start' button. Then remove it. (maybe turn it upside down to get the bottom finish right, so there might be an extra step). Given how cheap the labor is and the far that they only need one or two setups per part, it might not require an automated assembly line.

Haha ... but then the Dells of this world will all want Liquid Metal as unibody milled aluminum will be so old fashioned.

How is not unfair.  Sure you could argue that Apple invented the use of Aluminum Unibodys.  So lets ignore that.  They are still harming competition when it comes to chips and flash memory etc...  They get better prices than everyone else.  And your predictable answer is for people to innovate.

 

And when Microsoft does actually innovate with the Surface... it uses another metal that is in larger supply and uses a brand new vapor deposite method that creates a durable surface with nice finish.   You and all other claim price is the only way it will sell, yet everything is more expensive than what Apple gets it at.  Ultimately the Flash, Intel Processor etc are the same as what Apple uses.

 

Or I guess as an Apple fanboy site, we should just all use Apple products.  Because that is wonderful for innovation and utlimately pricing.

What he said.

Actually in terms of production line capability I think the number is overstated.  Many machine shops have a mix of manual and CNC machines.  This is part of the evolution of US industrial practice.  The UK paradigm (150 years ago) was one machine/skilled operator - one dedicated part.  The US went to one machine/skilled operator - many different parts.  China in some ways has the advantage in that they have only really industrialized in the last 20 years  As a result they have invested heavily in CNC versus manual machines.  When you have a  production line like Apple needs you have many machines, a few programmers and a lot of unskilled operators.

Everyone in the US want to be paid as a skilled worker so even if there were similar production lines available in the US they just couldn't compete.  US manufacturing has to come with terms with the new reality or they will become has-beens like UK manufacturing.

I dunno - 7" tablets happened partly because competitors couldn't afford the parts and partly because they were scarce (probably driving up costs further). Apple invented the unibody processes for mass production - it would make sense that they would have enough of a lead and volume to cause constraint issues.

Then again, as you point out with pricing so near a MacBook Air why not just get the real thing? Probably the reason for lackluster sales on the PC side.

Sure - but part of a free market is you have to pay a profit. Yeah, they can offer $11 - but if that causes them to loose money on every unit sold, then effectively they are blocked from that option.

Thinking different is certainly not necessarily unique to Apple. The problem for PC vendors is they are high volume, low margin. They don't have the profits that Apple does to invest in new technology. They also don't individually have the ability to get volumes similar to Apple - except for a few companies like HP, Dell and maybe Acer/Asus. That's what makes Microsoft's move with Surface fascinating. If it's the least bit successful, what's to stop Microsoft from switching models to Apple's entirely? I think it would be fascinating. Personally I think the whole multiple hardware vendor/clone thing has been WAY overblown and caused far more problems than benefits. PC Manufacturers don't innovate - they take Intel reference designs and churn 'em out (yes, I'm looking at you Dell). What benefit is that now? How many variations of an Nvidia graphics card do you really need anyway?

Yeah, but make millions at a reasonable cost?

Anyone can make 5 to 10. Making millions with consistency and profitability - now that's the trick!

If it's so easy then why aren't more PC manufacturers doing it?

Again, five to ten is easy - millions? You may know machine shops but you know nothing about mass production or economies of scale.

!!!

Wow. I almost don't know where to begin. You do realize that Apple just didn't get that pricing automatically, or that they did the equivalent of rob a bank to get it. They get that pricing because they have the volume and the willingness to pay up front. Cash on the barrel head.

They earned it.

Well duh! How the hell do you think Apple got successful enough to now be in the position to get the favorable pricing that for some unfathomable reason you think is somehow unfair?

Especially since now, particularly with Mobile devices and in particular tablets the tables have turned and the rest of the industry can't compete with Apple on price - never mind overall quality or ecosystem.

What is innovative about the surface? Slapping a Metrto interface layer on top of the same tired windows tablet strategy that has gone NOWHERE in the last 10 years?

The Surface is a souped up netbook with Metro tiled on top. There is nothing innovative or revolutionary about it. The fact that it REQUIRES a stylus for the non-Metro apps speaks volumes....

And it's not shipping. Nor do we know anything about price, battery life or software stability. Microsoft wouldn't let anyone play with it so they must be REAL confident on their software :P

And if Microsoft can do all that and maintain price parity with Apple, bully for them! That's what competition is about.

Wow - your mad with Apple because their products are too cheap and it's unfair? I don't know if I can handle this, especially after dealing with decades of snide comments about the "Apple Tax"...

But to address your sarcastic fanboy comment - I use Apple products because, today, for me, THEY ARE THE BEST. If they cease being the best, I will switch. I dropped Apple in the craptastic Performa days, and didn't come back until well into the second generation iMacs - and even then it was only until the mid 2000's where I switch back to using Macs as my primary computing device.

I'm a fan of Apple because of what they deliver, not because they are just "Apple". If Microsoft or someone else can do it better, I have no problem using them. I have an Xbox 360 and like it. I think Windows Home Server is a vastly underrated product and it serves many useful functions for me. But when it comes to desktop computers, phones and tablets in my opinion there is no one even remotely close. With the iPad, Apple is so far ahead of everyone I don't know if anyone will ever be able to catch up. Sure, Google may be able to flood the market with $200 tablets - but will they make money? Google makes more money from iOS ads than they do for Android - and that's before you factor in all the costs related to acquiring Android and maintaining it over the years. You think Microsoft was in the hole for years with the Xbox? Go read Asymco.com - Microsoft are going to look like rank amateurs at burning through cash compared to Google... I don't know why Google shareholders don't have torches and pitchforks out, honestly... probably because most of them just don't realize how much smoke and mirrors is really going on :P

 

It is true that PC vendors don't have the profits that Apple makes. However, that is not the reason that they are at such a disadvantage to Apple. The reason is that Apple has a $95 billion cash horde that it uses strategically to buy whatever it needs to produce the products that it wants to make.

 

This gives Apple an insurmountable lead in product startup. Apple widens its insurmountable lead by by controlling its supply chain and distribution network to wring every cent of excess cost from it. We all remember when the PC vendors lamented that the MacBook Air's retail price was less than the production costs of their competing offerings. 

 

ok

All you really know is what the site reports. Do you know that they bought up machine shop capacity? We've also seen suggestions  that they set up new lines for CNCed cases. If you search the archives, you'll find a few articles on this from 2008. Regarding NAND, what's wrong with buying it in advance if they intend to use it? This becomes more of an issue if they're buying it to deny other manufacturers. It's sometimes reported that way, but this site is always somewhat biased. I hope Microsoft does well with it. I'll probably look at one. I looked at an ipad. It was cool, but I didn't buy it as I wouldn't end up using it. There are things that would make it useful to me, but it can't do them. I won't buy a device that I won't end up using right away.

You don't seem to get it.  Of course, any small machine shop could fabricate a few hundred MacBook chassis.   Could they quickly fab a hundred thousand?  How about a million?  Mass production is a tricky thing to get right.

 

Apple has simply locked up the the suppliers with the capacity to mass produce unibody laptop chassis.  It doesn't mean other laptop manufacturers have shortages of their laptops, it means they cannot even introduce products based on unibody designs, because if they tried, they couldn't make enough for it to be profitable.  There's nothing wrong with what Apple has done, as long as they aren't buying up capacity and letting it sit idle so competitors cannot use it.  

 

I still find it amazing how few manufacturers of laptops there really are.  Too bad Americans cant manufacture something so cool.

Edited by Junkyard Dawg - 6/28/12 at 9:15am

Mine is just before the Unibody........still running great since June 2008 with SSD in place and additional HDD on DVD bay.

 

Love the Macbook Pros. They build and engineered to last 5 years!