Now, how does Apple intend to appease iPhone 4 customers over the death grip issue? (The "stunning" bars issue is entirely separate). A free bumper or credit for a previously purchased bumper seems reasonable to me.
There are some nice iPhone 4 cases for about $20. They're relatively rugged and look nice. They'll protect your iPhone 4 investment from scratches and maybe some short drops for the life of the iPhone 4 contract. Anyone with even a lick of sense doesn't have to wait for Apple to improve the iPhone 4's reception or give them a bumper. I think that anyone with enough money to purchase an iPhone 4 should be able to afford to buy their own case.
There's some jackass doctor who's initiating a lawsuit because he's forced to carry two cellphones since he says the iPhone 4 drops his calls. He's worried about his patients not getting through to him. Most doctors draw down pretty decent salaries. He must be either too cheap to buy a case or too damn lazy to just return his iPhone 4 and get something else. I believe this highly-educated jackass is trying to prove some point about Apple not being able to screw consumers and get away with it. Of course, doctors would never try to deceive their own patients and get more money out of them. Nobody is twisting this doctor's arm to keep the iPhone 4, but I suppose there are always some people who want to become comic book superheroes and fight for the rights of mankind. It's not about the money, of course, it's the principle of the matter.
Not only is Apple accelerating its revenue, it?s pushing more of that revenue to the bottom line. But while its sales are accelerating, the growth in the cost to run the entire Apple operation is barely climbing.
Yes, it really is a big deal to have more than one iPhone model - say, a CDMA iPhone.
Apple's success isn't a happy accident.
Great article with some interesting insight - thanks!
So by the numbers given and some extrapolation on my part (40% earnings growth in 2011, 2012), Apple could have $100B in cash as early as the end of 2012 (net income + 3% return on cash), barring any major (multi-billion dollar) acquisitions.
What on earth would Apple do with $100B in cash?
Yes. They'll probably have $100 billion in cash very soon. No one has any clue as to what the hell Apple plans to do with that cash. IF they were smart, they would have purchased a shit ton of their shares when Apple's share price was at $80. Interestingly enough, Apple will have over $80 per share in cash in just a few years. Can you believe the market got that irrational with the share price?
I hate to burst the fanboy bubble here (count me as one) but Apple's revenue and profit growth is threatened by their dependance on outsourced manufacturing. A combination of rising chinese salaries, a stronger yuan, and economic and supply chain factors will force Apple to raise prices (already did on the Mini) or to take a hit on their profit margins (not likely).
It may be time that Apple looked to taking manufacturing in-house once again. Foxconn/Hon Hai employees about 800,000 workers. More than a quarter of that number work on manufacturing Apple products. That's about 10 times as many workers as Apple has on its payrolls. Naturally one would imagine that highly automated factories in the US, Mexico, and Europe could replace many of those workers and be just as efficient and cost effective. Why it takes that many workers to produce a small number of products is a mystery. Are they assembling the Apple products by hand?
Of course, doctors would never try to deceive their own patients and get more money out of them. Nobody is twisting this doctor's arm to keep the iPhone 4, but I suppose there are always some people who want to become comic book superheroes and fight for the rights of mankind. It's not about the money, of course, it's the principle of the matter.
I agree: Apple should be held accountable.
You do realize the costs and inconvenience associated with reverting to a previous phone.
It's still got better reception than most other phones most of the time.
For all it's benefits, the unexpected dropped calls, missed calls and missed communications are what's at issue. As a crude analogy, Major League Baseball doesn't condone drug use even if players are setting records. Neither should Apple let stand a flawed design just because it's better most of the time.
Quote:
The bar and reception drop when gripped in certain ways is not an Apple problem alone. The "wrong" way is not a natural way for most people either.
On the contrary, the "wrong way" is natural for most people and is the manner of holding the iPhone 4 that Apple demonstrates in its own promotional videos. An unnatural cupping of the base of previous iPhones would cause reception problems. The iPhone 4 issue is far different, as it merely requires a light touch at the bottom left to completely kill reception in low-signal areas where other phones (previous generation iPhones) are able to make a call and are not so sensitive to normal handling.
We have seen reception drop isn't the problem. It's reception killed (hence death grip). I know of no other manufacturer who has this issue with their phones, nor has any previous model iPhone had this issue. It is no coincidence the iPhone 4 is the only one with an antenna exposed as part of the frame where the user is likely to touch it.
Apple is only paying a 23% tax rate? How can that be when the corporate rate is 36%? They are obviously not paying their fair share. The government is losing billions of dollars of revenue due to some tricky accounting!
Of course they have lives. Their lives will be even better and longer if the cover-up ends sooner rather than later. Cover-ups have a tendency to cause more harm than the original issue.
There is no cover up! The issue is the bar display is not an accurate logarithmic progression - it's back loaded - it shows 5 bars until the signal starts to really drop off, then goes from 5 to 1 quickly. In other words, it's overly optimistic. That's the software fix that Apple is talking about, making the bars represent more of what is happening in the real world.
It has NOTHING to do with the antenna design. There is no hardware problem. The main hardware problem is users don't like extending antenna's and the FCC has regulations about how much radiation can be exposed to a users head so the antenna is moved to where your hand is. Your hand is full of salty water and great at absorbing radio frequency radiation, so there you are. You can make the 3Gs and 3G do the same thing with the bars when upgraded to OS4 - the fact that the metal is exposed has nothing to do with it. Heck, you can make any cell phone with an internal antenna at the bottom where you normally put your hand do it! Unless you are in a faraday cage with controlled transmitters in a controlled environment, field tests are pretty much useless. One minute you could be on one tower, the next minute (that could coincided with you shifting the phone when changing grip, etc.) you can be on another. Farting around with a phone - any phone, not just an iPhone - and expecting to get any kind of meaningful data is purely anecdotal and far from conclusive.
If you really want to get informed about radio frequency radiation, design considerations and an all around interesting discussion I highly recommend you listen to This Week in Tech episode 255:
Specifically, the discussion gets good around the 34 minute mark when Leo starts asking some of the points you are making as questions, and Spencer Webb does a great job explaining why the bumper has a small effect - from moving your hand away from the antenna and not because it is "insulating" your hand from it. He points out that RF energy is not like electrical current. It's a pretty good discussion overall, and if you are really interesting in learning something and not just agitating on the Internet to hear yourself complain I highly recommend you give it a listen (or watch - they also have video up).
It may be time that Apple looked to taking manufacturing in-house once again.
I've been waiting for this - the first Macintosh and NeXT lines were automated. I think the problem for Apple is that all the components come from overseas as well. As someone pointed out, it's far easier to assemble the product near the point of origin for all the sub-components and then ship a completed product once than ship over lots of parts.
Then again, maybe it isn't and Apple is building a secret set of factories somewhere Production (or the lack of) does seem to be their main limiting factor. Lack of demand sure isn't (death grip "problems" aside )
Yes. They'll probably have $100 billion in cash very soon. No one has any clue as to what the hell Apple plans to do with that cash. IF they were smart, they would have purchased a shit ton of their shares when Apple's share price was at $80. Interestingly enough, Apple will have over $80 per share in cash in just a few years. Can you believe the market got that irrational with the share price?
It's not irrational, unless you're talking about the big drop rather than the current price. I was fortunately able to buy more at about 80. Have you looked at the P/E? It's 20. That's not high at all for a growth company. Cisco's is a bit over 19. Even though RIMM's stock is way down from earlier this year, the P/E is still over 23. Google's is also way down, but the P/E is over 20 as well. Look at ARM's P/E, it's over 59!
For all it's benefits, the unexpected dropped calls, missed calls and missed communications are what's at issue.
Then your doing something wrong, since the iPhone 4 easily rides out areas where my 3G and 3Gs would drop. And I'm not alone - Anadtech and others have published that the iPhone is demonstratively better than it's predicessors
Quote:
It is no coincidence the iPhone 4 is the only one with an antenna exposed as part of the frame where the user is likely to touch it.
Actually it is a coincidence (combined with 1 part angry blog and a thousand parts of internet echo chamber). Listen to the TWIT episode and become informed. It might save you from looking like a nonsensical idiot.
It's not irrational, unless you're talking about the big drop rather than the current price. I was fortunately able to buy more at about 80. Have you looked at the P/E? It's 20. That's not high at all for a growth company. Cisco's is a bit over 19. Even though RIMM's stock is way down from earlier this year, the P/E is still over 23. Google's is also way down, but the P/E is over 20 as well. Look at ARM's P/E, it's over 59!
Yes I'm fully aware of the fundamentals. I'll be writing a comparative analysis of Apple versus several large cap tech stocks over the next few weeks. Here are my comments of Apple in the $80's:
Apple is only paying a 23% tax rate? How can that be when the corporate rate is 36%? They are obviously not paying their fair share. The government is losing billions of dollars of revenue due to some tricky accounting!
Want to eliminate tricky accounting? Eliminate production taxes and switch to use tax. Drop all other taxes and just have a national sales tax. Illegal alien? Creative Accounting? Irrelevant. You consume, you pay tax. Everyone pays the same share. It simplifies the system, eliminates a bunch of bureaucratic red tape...
It will never happen since 90% of the time when people are crowing about "fair" payment of taxes, they want those better off than them to simply pay more than they do. Too many people like the current system because it's so complicated it's easy to manipulate.
Google's down nearly 30% in 2010, worse than the drops experienced by top rivals Microsoft (MSFT, Fortune 500) and Yahoo (YHOO, Fortune 500).
Quote:
It's also looking more and more like Google, despite all its efforts to diversify, may be a one-trick pony after all.
Quote:
Some investors are also worried that Google has not been able to replicate its market dominance in other areas -- most notably, in the world of mobile devices and social networking.
Some investors are also worried that Google has not been able to replicate its market dominance in other areas -- most notably, in the world of mobile devices and social networking.
That's the problem with dominance - it's fleeting. That's why Apple isn't focused on blind market share. Profitability is a far more logical goal - and if that strategy hasn't been validated by Apple's continued success then I don't know what will convince people.
Then can we call it Apple's not taking direct aim at the real issue?
Quote:
The issue is the bar display is not an accurate logarithmic progression - it's back loaded - it shows 5 bars until the signal starts to really drop off, then goes from 5 to 1 quickly. In other words, it's overly optimistic. That's the software fix that Apple is talking about, making the bars represent more of what is happening in the real world.
The number of bars displayed is indeed software. Apple was "stunned". Gosh, oh, golly. The press repeats the story and naively assumes this will address the antenna design problem. From my own observations and the number of similar observations posted on the 'net, I'm quite certain it won't.
Quote:
It has NOTHING to do with the antenna design. There is no hardware problem.
Right, the bars displayed is all about software. I agree with that. The real problem, though, is complete loss of reception when a perfectly good (even if low) signal is available.
Quote:
The main hardware problem is users don't like extending antenna's and the FCC has regulations about how much radiation can be exposed to a users head so the antenna is moved to where your hand is. Your hand is full of salty water and great at absorbing radio frequency radiation, so there you are.
Oh, please. When was the last time you saw a cell phone with retractable antenna? We're talking about an issue with the iPhone 4 as compared to all other cell phones manufactured in the past 3 years (to include the original iPhone).
Quote:
You can make the 3Gs and 3G do the same thing with the bars when upgraded to OS4
But Apple said the bars issue (which you suggest is the real issue) goes back to the original iPhone and iPhone OS 1.0. And the 3G and 3GS are not and never were so "touchy" as the iPhone 4.
Quote:
the fact that the metal is exposed has nothing to do with it.
How does the metal being exposed not have anything to do with it? It's unique to the iPhone 4 design, that your body can get so close to the antenna.
Quote:
Heck, you can make any cell phone with an internal antenna at the bottom where you normally put your hand do it!
Ah, but not so easily and naturally as with the iPhone 4.
Quote:
If you really want to get informed about radio frequency radiation, design considerations and an all around interesting discussion I highly recommend...
Actually, all I'm interested in is having Apple satisfy its customers and make sure they know what the real issue is so that they're not unwittingly bitten by it.
I hate to burst the fanboy bubble here (count me as one) but Apple's revenue and profit growth is threatened by their dependance on outsourced manufacturing. A combination of rising chinese salaries, a stronger yuan, and economic and supply chain factors will force Apple to raise prices (already did on the Mini) or to take a hit on their profit margins (not likely).
It may be time that Apple looked to taking manufacturing in-house once again. Foxconn/Hon Hai employees about 800,000 workers. More than a quarter of that number work on manufacturing Apple products. That's about 10 times as many workers as Apple has on its payrolls. Naturally one would imagine that highly automated factories in the US, Mexico, and Europe could replace many of those workers and be just as efficient and cost effective. Why it takes that many workers to produce a small number of products is a mystery. Are they assembling the Apple products by hand?
I'm not terribly worried if the price of manufacturing goes up. Apple's margin on an iPhone is about 40%? So even a $10 increase in manufacturing costs only represents 1.7% decrease in margins assuming a $600 cost to AT&T - so down to 38.3%. Not the end of the world. The BOM is made up of parts from around the world, not all Chinese sourced. Its just assembled there. Meanwhile the average Foxconn worker gets paid $300/mo including overtime - pennies per iPhone produced.
Crazy stuff would have to happen to get Apple or any other consumer electronics company to move out of China on a cost basis.
Yes I'm fully aware of the fundamentals. I'll be writing a comparative analysis of Apple versus several large cap tech stocks over the next few weeks. Here are my comments of Apple in the $80's:
Oh, I know you're aware. I've been following your analysis since you started. It's very good. I'm just wondering where the "irrational" came from. Which price, the current one, or the one during the height (if you could call it that) of the recession at 80? I don't think the current price is irrational.
Comments
http://www.theonion.com/video/new-ap...e-to-ta,17693/
Marvelous.
Now, how does Apple intend to appease iPhone 4 customers over the death grip issue? (The "stunning" bars issue is entirely separate). A free bumper or credit for a previously purchased bumper seems reasonable to me.
There are some nice iPhone 4 cases for about $20. They're relatively rugged and look nice. They'll protect your iPhone 4 investment from scratches and maybe some short drops for the life of the iPhone 4 contract. Anyone with even a lick of sense doesn't have to wait for Apple to improve the iPhone 4's reception or give them a bumper. I think that anyone with enough money to purchase an iPhone 4 should be able to afford to buy their own case.
Once you get past the Ford ad:
http://www.theonion.com/video/new-ap...e-to-ta,17693/
That was very good, I can (almost) see Apple doing that.
Not only is Apple accelerating its revenue, it?s pushing more of that revenue to the bottom line. But while its sales are accelerating, the growth in the cost to run the entire Apple operation is barely climbing.
Yes, it really is a big deal to have more than one iPhone model - say, a CDMA iPhone.
Apple's success isn't a happy accident.
Great article with some interesting insight - thanks!
So by the numbers given and some extrapolation on my part (40% earnings growth in 2011, 2012), Apple could have $100B in cash as early as the end of 2012 (net income + 3% return on cash), barring any major (multi-billion dollar) acquisitions.
What on earth would Apple do with $100B in cash?
Yes. They'll probably have $100 billion in cash very soon. No one has any clue as to what the hell Apple plans to do with that cash. IF they were smart, they would have purchased a shit ton of their shares when Apple's share price was at $80. Interestingly enough, Apple will have over $80 per share in cash in just a few years. Can you believe the market got that irrational with the share price?
http://www.eweek.com/c/a/Mobile-and-...Report-366390/
It may be time that Apple looked to taking manufacturing in-house once again. Foxconn/Hon Hai employees about 800,000 workers. More than a quarter of that number work on manufacturing Apple products. That's about 10 times as many workers as Apple has on its payrolls. Naturally one would imagine that highly automated factories in the US, Mexico, and Europe could replace many of those workers and be just as efficient and cost effective. Why it takes that many workers to produce a small number of products is a mystery. Are they assembling the Apple products by hand?
Of course, doctors would never try to deceive their own patients and get more money out of them. Nobody is twisting this doctor's arm to keep the iPhone 4, but I suppose there are always some people who want to become comic book superheroes and fight for the rights of mankind. It's not about the money, of course, it's the principle of the matter.
I agree: Apple should be held accountable.
You do realize the costs and inconvenience associated with reverting to a previous phone.
It's still got better reception than most other phones most of the time.
For all it's benefits, the unexpected dropped calls, missed calls and missed communications are what's at issue. As a crude analogy, Major League Baseball doesn't condone drug use even if players are setting records. Neither should Apple let stand a flawed design just because it's better most of the time.
The bar and reception drop when gripped in certain ways is not an Apple problem alone. The "wrong" way is not a natural way for most people either.
On the contrary, the "wrong way" is natural for most people and is the manner of holding the iPhone 4 that Apple demonstrates in its own promotional videos. An unnatural cupping of the base of previous iPhones would cause reception problems. The iPhone 4 issue is far different, as it merely requires a light touch at the bottom left to completely kill reception in low-signal areas where other phones (previous generation iPhones) are able to make a call and are not so sensitive to normal handling.
We have seen reception drop isn't the problem. It's reception killed (hence death grip). I know of no other manufacturer who has this issue with their phones, nor has any previous model iPhone had this issue. It is no coincidence the iPhone 4 is the only one with an antenna exposed as part of the frame where the user is likely to touch it.
Of course they have lives. Their lives will be even better and longer if the cover-up ends sooner rather than later. Cover-ups have a tendency to cause more harm than the original issue.
There is no cover up! The issue is the bar display is not an accurate logarithmic progression - it's back loaded - it shows 5 bars until the signal starts to really drop off, then goes from 5 to 1 quickly. In other words, it's overly optimistic. That's the software fix that Apple is talking about, making the bars represent more of what is happening in the real world.
It has NOTHING to do with the antenna design. There is no hardware problem. The main hardware problem is users don't like extending antenna's and the FCC has regulations about how much radiation can be exposed to a users head so the antenna is moved to where your hand is. Your hand is full of salty water and great at absorbing radio frequency radiation, so there you are. You can make the 3Gs and 3G do the same thing with the bars when upgraded to OS4 - the fact that the metal is exposed has nothing to do with it. Heck, you can make any cell phone with an internal antenna at the bottom where you normally put your hand do it! Unless you are in a faraday cage with controlled transmitters in a controlled environment, field tests are pretty much useless. One minute you could be on one tower, the next minute (that could coincided with you shifting the phone when changing grip, etc.) you can be on another. Farting around with a phone - any phone, not just an iPhone - and expecting to get any kind of meaningful data is purely anecdotal and far from conclusive.
If you really want to get informed about radio frequency radiation, design considerations and an all around interesting discussion I highly recommend you listen to This Week in Tech episode 255:
http://twit.tv/255
Specifically, the discussion gets good around the 34 minute mark when Leo starts asking some of the points you are making as questions, and Spencer Webb does a great job explaining why the bumper has a small effect - from moving your hand away from the antenna and not because it is "insulating" your hand from it. He points out that RF energy is not like electrical current. It's a pretty good discussion overall, and if you are really interesting in learning something and not just agitating on the Internet to hear yourself complain I highly recommend you give it a listen (or watch - they also have video up).
It may be time that Apple looked to taking manufacturing in-house once again.
I've been waiting for this - the first Macintosh and NeXT lines were automated. I think the problem for Apple is that all the components come from overseas as well. As someone pointed out, it's far easier to assemble the product near the point of origin for all the sub-components and then ship a completed product once than ship over lots of parts.
Then again, maybe it isn't and Apple is building a secret set of factories somewhere
Yes. They'll probably have $100 billion in cash very soon. No one has any clue as to what the hell Apple plans to do with that cash. IF they were smart, they would have purchased a shit ton of their shares when Apple's share price was at $80. Interestingly enough, Apple will have over $80 per share in cash in just a few years. Can you believe the market got that irrational with the share price?
It's not irrational, unless you're talking about the big drop rather than the current price. I was fortunately able to buy more at about 80. Have you looked at the P/E? It's 20. That's not high at all for a growth company. Cisco's is a bit over 19. Even though RIMM's stock is way down from earlier this year, the P/E is still over 23. Google's is also way down, but the P/E is over 20 as well. Look at ARM's P/E, it's over 59!
For all it's benefits, the unexpected dropped calls, missed calls and missed communications are what's at issue.
Then your doing something wrong, since the iPhone 4 easily rides out areas where my 3G and 3Gs would drop. And I'm not alone - Anadtech and others have published that the iPhone is demonstratively better than it's predicessors
It is no coincidence the iPhone 4 is the only one with an antenna exposed as part of the frame where the user is likely to touch it.
Actually it is a coincidence (combined with 1 part angry blog and a thousand parts of internet echo chamber). Listen to the TWIT episode and become informed. It might save you from looking like a nonsensical idiot.
It's not irrational, unless you're talking about the big drop rather than the current price. I was fortunately able to buy more at about 80. Have you looked at the P/E? It's 20. That's not high at all for a growth company. Cisco's is a bit over 19. Even though RIMM's stock is way down from earlier this year, the P/E is still over 23. Google's is also way down, but the P/E is over 20 as well. Look at ARM's P/E, it's over 59!
Yes I'm fully aware of the fundamentals. I'll be writing a comparative analysis of Apple versus several large cap tech stocks over the next few weeks. Here are my comments of Apple in the $80's:
http://seekingalpha.com/article/1029...-sector-stocks
http://www.macobserver.com/tmo/forums/viewthread/74040/
Apple is only paying a 23% tax rate? How can that be when the corporate rate is 36%? They are obviously not paying their fair share. The government is losing billions of dollars of revenue due to some tricky accounting!
Want to eliminate tricky accounting? Eliminate production taxes and switch to use tax. Drop all other taxes and just have a national sales tax. Illegal alien? Creative Accounting? Irrelevant. You consume, you pay tax. Everyone pays the same share. It simplifies the system, eliminates a bunch of bureaucratic red tape...
It will never happen since 90% of the time when people are crowing about "fair" payment of taxes, they want those better off than them to simply pay more than they do. Too many people like the current system because it's so complicated it's easy to manipulate.
http://money.cnn.com/2010/07/07/mark...buzz/index.htm
Google's down nearly 30% in 2010, worse than the drops experienced by top rivals Microsoft (MSFT, Fortune 500) and Yahoo (YHOO, Fortune 500).
It's also looking more and more like Google, despite all its efforts to diversify, may be a one-trick pony after all.
Some investors are also worried that Google has not been able to replicate its market dominance in other areas -- most notably, in the world of mobile devices and social networking.
Some investors are also worried that Google has not been able to replicate its market dominance in other areas -- most notably, in the world of mobile devices and social networking.
That's the problem with dominance - it's fleeting. That's why Apple isn't focused on blind market share. Profitability is a far more logical goal - and if that strategy hasn't been validated by Apple's continued success then I don't know what will convince people.
There is no cover up!
Then can we call it Apple's not taking direct aim at the real issue?
The issue is the bar display is not an accurate logarithmic progression - it's back loaded - it shows 5 bars until the signal starts to really drop off, then goes from 5 to 1 quickly. In other words, it's overly optimistic. That's the software fix that Apple is talking about, making the bars represent more of what is happening in the real world.
The number of bars displayed is indeed software. Apple was "stunned". Gosh, oh, golly. The press repeats the story and naively assumes this will address the antenna design problem. From my own observations and the number of similar observations posted on the 'net, I'm quite certain it won't.
It has NOTHING to do with the antenna design. There is no hardware problem.
Right, the bars displayed is all about software. I agree with that. The real problem, though, is complete loss of reception when a perfectly good (even if low) signal is available.
The main hardware problem is users don't like extending antenna's and the FCC has regulations about how much radiation can be exposed to a users head so the antenna is moved to where your hand is. Your hand is full of salty water and great at absorbing radio frequency radiation, so there you are.
Oh, please. When was the last time you saw a cell phone with retractable antenna? We're talking about an issue with the iPhone 4 as compared to all other cell phones manufactured in the past 3 years (to include the original iPhone).
You can make the 3Gs and 3G do the same thing with the bars when upgraded to OS4
But Apple said the bars issue (which you suggest is the real issue) goes back to the original iPhone and iPhone OS 1.0. And the 3G and 3GS are not and never were so "touchy" as the iPhone 4.
the fact that the metal is exposed has nothing to do with it.
How does the metal being exposed not have anything to do with it? It's unique to the iPhone 4 design, that your body can get so close to the antenna.
Heck, you can make any cell phone with an internal antenna at the bottom where you normally put your hand do it!
Ah, but not so easily and naturally as with the iPhone 4.
If you really want to get informed about radio frequency radiation, design considerations and an all around interesting discussion I highly recommend...
Actually, all I'm interested in is having Apple satisfy its customers and make sure they know what the real issue is so that they're not unwittingly bitten by it.
I hate to burst the fanboy bubble here (count me as one) but Apple's revenue and profit growth is threatened by their dependance on outsourced manufacturing. A combination of rising chinese salaries, a stronger yuan, and economic and supply chain factors will force Apple to raise prices (already did on the Mini) or to take a hit on their profit margins (not likely).
http://www.eweek.com/c/a/Mobile-and-...Report-366390/
It may be time that Apple looked to taking manufacturing in-house once again. Foxconn/Hon Hai employees about 800,000 workers. More than a quarter of that number work on manufacturing Apple products. That's about 10 times as many workers as Apple has on its payrolls. Naturally one would imagine that highly automated factories in the US, Mexico, and Europe could replace many of those workers and be just as efficient and cost effective. Why it takes that many workers to produce a small number of products is a mystery. Are they assembling the Apple products by hand?
I'm not terribly worried if the price of manufacturing goes up. Apple's margin on an iPhone is about 40%? So even a $10 increase in manufacturing costs only represents 1.7% decrease in margins assuming a $600 cost to AT&T - so down to 38.3%. Not the end of the world. The BOM is made up of parts from around the world, not all Chinese sourced. Its just assembled there. Meanwhile the average Foxconn worker gets paid $300/mo including overtime - pennies per iPhone produced.
Crazy stuff would have to happen to get Apple or any other consumer electronics company to move out of China on a cost basis.
Yes I'm fully aware of the fundamentals. I'll be writing a comparative analysis of Apple versus several large cap tech stocks over the next few weeks. Here are my comments of Apple in the $80's:
http://seekingalpha.com/article/1029...-sector-stocks
http://www.macobserver.com/tmo/forums/viewthread/74040/
Oh, I know you're aware.