'Ultrabook' makers squeezed by Apple's control of metal chassis supply
Long known as a master of the supply chain for overseas components, Apple has reportedly out-muscled the competition for yet another crucial element of its products: unibody metal notebook chassis.
Intel and its partner PC makers have been "aggressively searching" for new materials to build chassis for the chipmaker's thin-and-light "Ultrabook" design. According to DigiTimes, companies have been forced to seek alternatives because Apple already controls most of the "significantly limited" capacity.
The most popular choice for Ultrabook designs is said to be magnesium-aluminum chassis, ideal for creating a notebook less than 0.8-inch thick. But a unibody magnesium-aluminum chassis requires expensive "CNC lathes," of which capacity is constrained.
Because CNC lathes are so expensive, the number of companies that can provide components to PC makers are limited. Together, Foxconn and Taiwan's Catcher Technology reportedly have more than 10,000 CNC lathes for metal chassis production.
Both of those companies are said to supply unibody shells for notebooks to Apple, which leaves Ultrabook makers competing for remaining capacity from the companies.
As a result, Intel and its partners are said to be exploring the use of fiberglass chassis instead of magnesium-aluminum. The report said that three PC makers have already decided to adopt fiberglass for their Ultrabooks.
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.
The DigiTimes report comes on the heels of another story which indicated that Ultrabook makers are struggling to compete with Apple's MacBook Air pricing. Intel hopes to sell Ultrabook systems for less than $1,000, but some of the first models set to become available are well above that price threshold. For example, Asustek's 13.3-inch UX31 is set to cost $1,600.
Intel's Ultrabook design is a direct response to Apple's popular MacBook Air lineup. It calls for systems to retail for less than four figures, and sport form factors that are no more than 20 millimeters thick, with "tablet-like features" in a "thin, light and elegant design."
Last month, Apple updated its MacBook Air lineup, adding Intel's latest-generation Sandy Bridge processors, backlit keyboards and the new high-speed Thunderbolt port. The entry-level $999 model has proved so popular that it prompted Apple to discontinue its white legacy MacBook, which was previously sold at the same price point.
Intel and its partner PC makers have been "aggressively searching" for new materials to build chassis for the chipmaker's thin-and-light "Ultrabook" design. According to DigiTimes, companies have been forced to seek alternatives because Apple already controls most of the "significantly limited" capacity.
The most popular choice for Ultrabook designs is said to be magnesium-aluminum chassis, ideal for creating a notebook less than 0.8-inch thick. But a unibody magnesium-aluminum chassis requires expensive "CNC lathes," of which capacity is constrained.
Because CNC lathes are so expensive, the number of companies that can provide components to PC makers are limited. Together, Foxconn and Taiwan's Catcher Technology reportedly have more than 10,000 CNC lathes for metal chassis production.
Both of those companies are said to supply unibody shells for notebooks to Apple, which leaves Ultrabook makers competing for remaining capacity from the companies.
As a result, Intel and its partners are said to be exploring the use of fiberglass chassis instead of magnesium-aluminum. The report said that three PC makers have already decided to adopt fiberglass for their Ultrabooks.
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.
The DigiTimes report comes on the heels of another story which indicated that Ultrabook makers are struggling to compete with Apple's MacBook Air pricing. Intel hopes to sell Ultrabook systems for less than $1,000, but some of the first models set to become available are well above that price threshold. For example, Asustek's 13.3-inch UX31 is set to cost $1,600.
Intel's Ultrabook design is a direct response to Apple's popular MacBook Air lineup. It calls for systems to retail for less than four figures, and sport form factors that are no more than 20 millimeters thick, with "tablet-like features" in a "thin, light and elegant design."
Last month, Apple updated its MacBook Air lineup, adding Intel's latest-generation Sandy Bridge processors, backlit keyboards and the new high-speed Thunderbolt port. The entry-level $999 model has proved so popular that it prompted Apple to discontinue its white legacy MacBook, which was previously sold at the same price point.
Comments
This is more a measure of Intel's confidence than Apple's dominance - I'm sure that Foxconn would be willing to buy more CNC machines if Intel signed a 10 year supply contract with penalty clauses for termination.
I wonder what happened to Apple's Liquid Glass venture?
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.
WTF?!?! PC notebooks are trying to compete with Apple price points (and can't)?! At what point did the tables turn and where the fuck have I been?!!
New world order.
WTF?!?! PC notebooks are trying to compete with Apple price points (and can't)?! At what point did the tables turn and where the fuck have I been?!!
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.
WTF?!?! PC notebooks are trying to compete with Apple price points (and can't)?! At what point did the tables turn and where the fuck have I been?!!
At the mid to high end, this is nothing too new, just even more pronounced now. The myth has been that Apple is more expensive. The reality is that Apple just didn't cater to the cheap as shit market segment. At the higher end of the spectrum, Apple was always competitive or even better value than their competitors. Now with their supply chain muscle, they are able to dictate lower prices and better supply guarantees. It's really been this way since they started gobbling up the world supply of flash memory.
As for the unibody supply...i thought Apple had a patent on this process. If so, wouldn't that already lock out competitors from trying to source the process for their offerings?
I'm most definitely not a business man. So how does this work? How does $5 to $10 turn into $50 to $100?
Ultralight books have been around before. I highly doubt Apple's demands have depleted the supply of CNC mills or various metals to make chasis, if everyone else was thinking of doing the same. As it is, a lot of chassis are made with die casting methods, dies custom to a specific part, then maybe followed up with a quick finishing for screw holes.
WTF?!?! PC notebooks are trying to compete with Apple price points (and can't)?! At what point did the tables turn and where the fuck have I been?!!
It happened in 2010 with the MacBook Airs. I freakin' love hearing PC vendors complain they can't complete with Apple on price!
"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?
Markup, baby. Markup. Although I think the 10x margin is exaggerated.
Markup, baby. Markup. Although I think the 10x margin is exaggerated.
It might not be exaggerated, they have to ammortize the cost of designing the part, making the molds and other custom tooling, startup costs, shipping etc. The incremental cost of the part doesn't reflect the entire cost of getting the part made.
"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?
With today's tight margins I doubt if it would add more than $45.
I think the manufacturer was just pulling figures out of his ass... a little hyperbole adds some drama...
With today's tight margins I doubt if it would add more than $45.
I think the author was just pulling figures out of his ass... a little hyperbole adds some drama...
Even if the numbers are exaggerated, I still don't get it. $10 is $10. How does it become $100. Remember this is a savings, right? So the case costs $10 less to make in fiberglass than of metal. How does this become a $100 savings at retail? It's still just a savings of $10.
Even if the numbers are exaggerated, I still don't get it. $10 is $10. How does it become $100. Remember this is a savings, right? So the case costs $10 less to make in fiberglass than of metal. How does this become a $100 savings at retail? It's still just a savings of $10.
Never mind... sorry... just re-read your post... okay... I'm stumped. Jeff might have the answer...
I wonder what happened to Apple's Liquid Glass venture?
I'm waiting for the transparent aluminum.
Actually, it's 'CNC mill', not lathe, but carry on...
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
Even if the numbers are exaggerated, I still don't get it. $10 is $10. How does it become $100. Remember this is a savings, right? So the case costs $10 less to make in fiberglass than of metal. How does this become a $100 savings at retail? It's still just a savings of $10.
They use more than 1 segment in a laptop?