First, there are ways to build a computer other than using machined aluminum.
Second, aluminum machining capability is available in thousands, if not millions, of shops around the country. There's no way Apple has monopolized the aluminum milling market.
Actually if you root around the internet a little you'll find a report saying that the companies that build the NC machines to perform the fine aluminum machining that ultra books require are all tapped out supplying Apple's requirements (i.e. Apple's contract mfrs who have committed their capacity to Apple) so there really is limited aluminum machining capacity out there to service Apple's competitors.
Struggling to compete with the pricing of Apple's MacBook Air lineup, "Ultrabook" PC makers have again asked Intel to reduce the price of its mobile CPUs.
Executives from both Acer Taiwan and Compal Electronics have turned to Intel and asked the chipmaker to aid them in achieving pricing below $1,000, according to DigiTimes. Intel has partnered with PC makers to push a new specification, dubbed "Ultrabook," designed to compete with Apple's popular thin-and-light MacBook Air.
Let me see if I've fully grasped this novel concept:
Rather than reduce internal costs such as wages, salaries and benefits; become more cost-effective in marketing, distribution, and sales methods & procedures; improve assembly and product testing through quality and benchmarking initiatives; and institute policies designed specifically to reduce overall intra-company costs, Acer & Compal are requesting specific component manufacutrers to lower THEIR costs? What a unique and self-serving approach to conducting business in the 21st century.
Oh my gosh. Quit with the whining already! Why do PC mfgs want so desperately to engage in the 'race to the bottom'? It makes no sense for Intel to sacrifice margin for anyone. It doesn't matter who makes the ultra portables, Intel still gets the same amount of money.
Now, if sales of ultra-portables sucked rocks, or if there was any real competition from AMD in the space, then it would be in Intel's interest to shave some margin and/or produce a lower cost part. But right now, neither of these situations exist, so why do PC mfgs expect a hand out?
Ok, so let's say they finally persuade Intel to lower the price on CPUs, and ultrabooks come in just under $999 on the low end... So, Apple would then be able to sell the Macbook Air for say $959 because the CPUs will cost less for them too. How does this help anyone?
You might say price reductions benefit the consumer, but they don't really, because in the grand scheme of things the PC mfgs will have cut corners to reduce the price (they're already doing that) thereby producing poor quality products which have to be replaced more often, and Intel will be less profitable which means they'll have less money to spend on R&D and/or raw materials...
All these things come full circle and end up depressing the world economy and eroding the purchasing power of people's money. Arbitrarily reducing margin is a stupid thing to do. Now, if cost reductions can be made due to lower material costs, improved technology or processes, these are a benefit to consumers and businesses alike, because the margin stays the same and the product quality it not decreased.
So, PC mfg weenies, do some R&D and find improved tech/processes and stop your dam n complaining!
Oh, forgot about the banks. I'm talking about favoritism in what's supposed to be a free market economy.
However, that's secondary to the point I'm making. I knew people wouldn't give a crap about the real point, though.
Favoritism isn't illegal though - it's what all of the perfectly legal 'donations' to the politicians gets you. But it still has nothing at all to do with these companies asking Intel to lower chip pricing.
Tim Cook locked in production, got best price clauses in the contracts, and put the money up front. He might have even bought the production lines. These others can't touch that unless they put up big money. Looks like some companies are paying for squeezing the margins for all these years.
Favoritism isn't illegal though - it's what all of the perfectly legal 'donations' to the politicians gets you.
Fine, fair enough. Needs to be illegal, then, but fine.
Quote:
But it still has nothing at all to do with these companies asking Intel to lower chip pricing.
Eh, I see some operational similarities. The situation's certainly different, but operationally, this is exactly what's happening. Companies looking for handouts when they refuse to do the job on their own.
Let me see if I've fully grasped this novel concept:
Rather than reduce internal costs such as wages, salaries and benefits; become more cost-effective in marketing, distribution, and sales methods & procedures; improve assembly and product testing through quality and benchmarking initiatives; and institute policies designed specifically to reduce overall intra-company costs, Acer & Compal are requesting specific component manufacutrers to lower THEIR costs? What a unique and self-serving approach to conducting business in the 21st century.
right on, also, apple has a lock on the machines to make the case, others can't and use other materials, apple has them buffaloed and they want to blame someone
they want an excuse to put out junk and blame others, they can't compete on price, logistics (thank you tim cook) costs, etc
so let them put out junk and compete with that
just wait till apple uses a6 a7 of there own design in the macbook line wow bloodbath
Yep, they could go ahead and product other types of cases themselves, but then they would have to actually work to design those cases themselves and work out how to handle the different thermal specs since they couldn't just piggyback on someone else's reference specs.
As someone said, these clone makers just aren't set up to design and innovate. It's definitely a joke considering the 'Apple tax' stuff people still spout off about. Whether it's the iPad, the Air, the iMac (and maybe even the Pro's in the future?), these knockoff companies can't catch Apple on making a NICE machine.
Of course Intel is worried - if they can't get more Ultrabooks out at decent prices, they're afraid they're going to get eaten alive when the ARM Win8 laptops show up that are cheaper at the same form factor. I'm not sure that's quite valid when those ARM notebooks won't actually run the x86 Windows software, but I'm sure that's a large part of Intel's underlying insecurity.
If negotiating a sales contract equates to pressure, than possibly. However, in this case, the request for component price reductions appears to be predicated solely on one company's perceived need to be more competetive with another company. And in this case, with the component manufacturer footing the bill.
Apple does indeed pressure suppliers, but not in the same way. They don't whine and ask for a hand out - what they do is negotiate - they say, hey look, we want X million parts for X dollars, if you can do that, we have a deal, if you can't we'll go buy them from company Y. They also have the the cash to pay up front, which can look very appealing to a supplier, and result in better pricing.
If negotiating a sales contract equates to pressure, than possibly. However, in this case, the request for component price reductions appears to be predicated solely on one company's perceived need to be more competetive with another company. And in this case, with the component manufacturer footing the bill.
Fine, fair enough. Needs to be illegal, then, but fine.
Yep, it should be, as should a lot of what our fearless leaders are up to, from illegitimate wars to general economic and trade policy that actively pushes jobs overseas when there are no legitimate alternatives domestically to replace them.
Quote:
Eh, I see some operational similarities. The situation's certainly different, but operationally, this is exactly what's happening. Companies looking for handouts when they refuse to do the job on their own.
Still don't think so. Intel is worried about the coming ARM laptop assault, not Apple specifically. They want all of the PC makers to have something as nice as the Air in order to keep a healthy market for their chips and prevent market movement to a competing CPU architecture. The PC clone makers aren't competent to do this design work, and Intel knows it, so it's in their interest to make it happen. (Apple is a much larger company than these other ones individually, and knows how to do actual work to make their products better, has margins that let it fund R&D, etc.)
As a second issue, Intel lending a hand with design is one piece, but these makers are pushing for chip price cuts to try to get themselves better margins on these machines using what they know are Intel's concerns over market share for extra pressure. That's business negotiating, but it's also a reflection of the fact that if THEY make these machines and they don't sell (and charging Apple prices for non-Apple machines may NOT sell well!), THEY sit on unsold inventory and eat the losses, not Intel.
So I just don't see this as equivalent to an auto maker or bank looking for a bailout or loan. These manufacturers aren't competent to do this work AND Intel has a huge vested interest in getting them to succeed - one that may be worth Intel cutting some of their margins to avoid a larger bleed.
Apple does indeed pressure suppliers, but not in the same way. They don't whine and ask for a hand out - what they do is negotiate - they say, hey look, we want X million parts for X dollars, if you can do that, we have a deal, if you can't we'll go buy them from company Y. They also have the the cash to pay up front, which can look very appealing to a supplier, and result in better pricing.
Then let me see if I can answer in a more age and developmentally appropriate manner for you.
Jimmy and Tommy have skateboards, which have similar features and functionality. The young men would like to purchase new skateboards. Jimmy takes on a paper route and forgoes his weekly candy bar to earn money and reduce his expenses for the purchase. Tommy companies bitterly to anyone within earshot about the price, and writes a letter to the company president. "If the folks who made the wheels didn't charge so much, I could afford a new skateboard. You should do something for ME!"
Then let me see if I can answer in a more age and developmentally appropriate manner for you.
Jimmy and Tommy have skateboards, which have similar features and functionality. The young men would like to purchase new skateboards. Jimmy takes on a paper route and forgoes his weekly candy bar to earn money and reduce his expenses for the purchase. Tommy companies bitterly to anyone within earshot about how the price, and writes a letter to the company president. "If the folks who made the wheels didn't charge so much, I could afford a new skateboard".
If negotiating a sales contract equates to pressure, than possibly. However, in this case, the request for component price reductions appears to be predicated solely on one company's perceived need to be more competetive with another company. And in this case, with the component manufacturer footing the bill.
I think they call it business. You can bet 1 billion dollars that Apple competes for the best price and capacity for manufacturing and yes suppliers may get squeezed. That is business and its doubtful Apple is running a charity.
The reason Dell can't compete is that Apple spends twice what Dell spends on R&D. Worse for Dell, they have a buttload more products to do R&D on than Apple does; Dell is the "kitchen sink" manufacturer, trying to cover every possible form factor. Apple is very focused on a select few product lines.
Quote:
Originally Posted by Jacksons
Yes Apple will also be able to reduce prices. However, Apple's market is the above 1000$ market. The pc makers have the sub 1000$ market. So even though all prices will come down, it is important for pc makers to get below the 1000$ level EVEN if Apple's prices come down as well.
Yeah, but since Apple has retired the low-end MacBook line, they can cut the price on the Air if they need to without fear of cannibalizing sales.
From what I've read, it seems that Tim Cook was the missing piece that Apple needed to compete on price in the tech manufacturing world. And they're still able to maintain their profit margins. Apple won't be quick to cut their price until sales start slowing down and they aren't maximizing profit. I think the Air could still be very profitable at the $899 price point.
Apple is willing to compete on price when it makes sense. As evidence, I would point to the $50 iPhone 3GS.
Comments
This is silly.
First, there are ways to build a computer other than using machined aluminum.
Second, aluminum machining capability is available in thousands, if not millions, of shops around the country. There's no way Apple has monopolized the aluminum milling market.
Actually if you root around the internet a little you'll find a report saying that the companies that build the NC machines to perform the fine aluminum machining that ultra books require are all tapped out supplying Apple's requirements (i.e. Apple's contract mfrs who have committed their capacity to Apple) so there really is limited aluminum machining capacity out there to service Apple's competitors.
Struggling to compete with the pricing of Apple's MacBook Air lineup, "Ultrabook" PC makers have again asked Intel to reduce the price of its mobile CPUs.
Executives from both Acer Taiwan and Compal Electronics have turned to Intel and asked the chipmaker to aid them in achieving pricing below $1,000, according to DigiTimes. Intel has partnered with PC makers to push a new specification, dubbed "Ultrabook," designed to compete with Apple's popular thin-and-light MacBook Air.
Let me see if I've fully grasped this novel concept:
Rather than reduce internal costs such as wages, salaries and benefits; become more cost-effective in marketing, distribution, and sales methods & procedures; improve assembly and product testing through quality and benchmarking initiatives; and institute policies designed specifically to reduce overall intra-company costs, Acer & Compal are requesting specific component manufacutrers to lower THEIR costs? What a unique and self-serving approach to conducting business in the 21st century.
Now, if sales of ultra-portables sucked rocks, or if there was any real competition from AMD in the space, then it would be in Intel's interest to shave some margin and/or produce a lower cost part. But right now, neither of these situations exist, so why do PC mfgs expect a hand out?
Ok, so let's say they finally persuade Intel to lower the price on CPUs, and ultrabooks come in just under $999 on the low end... So, Apple would then be able to sell the Macbook Air for say $959 because the CPUs will cost less for them too. How does this help anyone?
You might say price reductions benefit the consumer, but they don't really, because in the grand scheme of things the PC mfgs will have cut corners to reduce the price (they're already doing that) thereby producing poor quality products which have to be replaced more often, and Intel will be less profitable which means they'll have less money to spend on R&D and/or raw materials...
All these things come full circle and end up depressing the world economy and eroding the purchasing power of people's money. Arbitrarily reducing margin is a stupid thing to do. Now, if cost reductions can be made due to lower material costs, improved technology or processes, these are a benefit to consumers and businesses alike, because the margin stays the same and the product quality it not decreased.
So, PC mfg weenies, do some R&D and find improved tech/processes and stop your dam n complaining!
Oh, forgot about the banks. I'm talking about favoritism in what's supposed to be a free market economy.
However, that's secondary to the point I'm making. I knew people wouldn't give a crap about the real point, though.
Favoritism isn't illegal though - it's what all of the perfectly legal 'donations' to the politicians gets you. But it still has nothing at all to do with these companies asking Intel to lower chip pricing.
Favoritism isn't illegal though - it's what all of the perfectly legal 'donations' to the politicians gets you.
Fine, fair enough. Needs to be illegal, then, but fine.
But it still has nothing at all to do with these companies asking Intel to lower chip pricing.
Eh, I see some operational similarities. The situation's certainly different, but operationally, this is exactly what's happening. Companies looking for handouts when they refuse to do the job on their own.
Oh my gosh. Quit with the whining already!
Agreed, sounds like a seafood dinner. Wine and crab...
Let me see if I've fully grasped this novel concept:
Rather than reduce internal costs such as wages, salaries and benefits; become more cost-effective in marketing, distribution, and sales methods & procedures; improve assembly and product testing through quality and benchmarking initiatives; and institute policies designed specifically to reduce overall intra-company costs, Acer & Compal are requesting specific component manufacutrers to lower THEIR costs? What a unique and self-serving approach to conducting business in the 21st century.
Yeah! Right! Apple never pressures suppliers.
right on, also, apple has a lock on the machines to make the case, others can't and use other materials, apple has them buffaloed and they want to blame someone
they want an excuse to put out junk and blame others, they can't compete on price, logistics (thank you tim cook) costs, etc
so let them put out junk and compete with that
just wait till apple uses a6 a7 of there own design in the macbook line wow bloodbath
Yep, they could go ahead and product other types of cases themselves, but then they would have to actually work to design those cases themselves and work out how to handle the different thermal specs since they couldn't just piggyback on someone else's reference specs.
As someone said, these clone makers just aren't set up to design and innovate. It's definitely a joke considering the 'Apple tax' stuff people still spout off about. Whether it's the iPad, the Air, the iMac (and maybe even the Pro's in the future?), these knockoff companies can't catch Apple on making a NICE machine.
Of course Intel is worried - if they can't get more Ultrabooks out at decent prices, they're afraid they're going to get eaten alive when the ARM Win8 laptops show up that are cheaper at the same form factor. I'm not sure that's quite valid when those ARM notebooks won't actually run the x86 Windows software, but I'm sure that's a large part of Intel's underlying insecurity.
Oh, forgot about the banks. I'm talking about favoritism in what's supposed to be a free market economy.
However, that's secondary to the point I'm making. I knew people wouldn't give a crap about the real point, though.
I give a crap. I just didn't know what you meant by illegal. And there's no free market economy any more than Yellowstone is a true wilderness.
Yeah! Right! Apple never pressures suppliers.
If negotiating a sales contract equates to pressure, than possibly. However, in this case, the request for component price reductions appears to be predicated solely on one company's perceived need to be more competetive with another company. And in this case, with the component manufacturer footing the bill.
Yeah! Right! Apple never pressures suppliers.
Apple does indeed pressure suppliers, but not in the same way. They don't whine and ask for a hand out - what they do is negotiate - they say, hey look, we want X million parts for X dollars, if you can do that, we have a deal, if you can't we'll go buy them from company Y. They also have the the cash to pay up front, which can look very appealing to a supplier, and result in better pricing.
If negotiating a sales contract equates to pressure, than possibly. However, in this case, the request for component price reductions appears to be predicated solely on one company's perceived need to be more competetive with another company. And in this case, with the component manufacturer footing the bill.
Now you are just playing with words.
Fine, fair enough. Needs to be illegal, then, but fine.
Yep, it should be, as should a lot of what our fearless leaders are up to, from illegitimate wars to general economic and trade policy that actively pushes jobs overseas when there are no legitimate alternatives domestically to replace them.
Eh, I see some operational similarities. The situation's certainly different, but operationally, this is exactly what's happening. Companies looking for handouts when they refuse to do the job on their own.
Still don't think so. Intel is worried about the coming ARM laptop assault, not Apple specifically. They want all of the PC makers to have something as nice as the Air in order to keep a healthy market for their chips and prevent market movement to a competing CPU architecture. The PC clone makers aren't competent to do this design work, and Intel knows it, so it's in their interest to make it happen. (Apple is a much larger company than these other ones individually, and knows how to do actual work to make their products better, has margins that let it fund R&D, etc.)
As a second issue, Intel lending a hand with design is one piece, but these makers are pushing for chip price cuts to try to get themselves better margins on these machines using what they know are Intel's concerns over market share for extra pressure. That's business negotiating, but it's also a reflection of the fact that if THEY make these machines and they don't sell (and charging Apple prices for non-Apple machines may NOT sell well!), THEY sit on unsold inventory and eat the losses, not Intel.
So I just don't see this as equivalent to an auto maker or bank looking for a bailout or loan. These manufacturers aren't competent to do this work AND Intel has a huge vested interest in getting them to succeed - one that may be worth Intel cutting some of their margins to avoid a larger bleed.
But the MacBook Air uses Intel chips!
So, if Intel lowers the price of their chips, then the MacBook Air can go lower on price.
Thank you!!!!!!!!!!!!! That was the first thing I thought of when I read the article. makes me think that the article is trash.
Apple does indeed pressure suppliers, but not in the same way. They don't whine and ask for a hand out - what they do is negotiate - they say, hey look, we want X million parts for X dollars, if you can do that, we have a deal, if you can't we'll go buy them from company Y. They also have the the cash to pay up front, which can look very appealing to a supplier, and result in better pricing.
And who is company Y when Intel is company X?
Now you are just playing with words.
Then let me see if I can answer in a more age and developmentally appropriate manner for you.
Jimmy and Tommy have skateboards, which have similar features and functionality. The young men would like to purchase new skateboards. Jimmy takes on a paper route and forgoes his weekly candy bar to earn money and reduce his expenses for the purchase. Tommy companies bitterly to anyone within earshot about the price, and writes a letter to the company president. "If the folks who made the wheels didn't charge so much, I could afford a new skateboard. You should do something for ME!"
Then let me see if I can answer in a more age and developmentally appropriate manner for you.
Jimmy and Tommy have skateboards, which have similar features and functionality. The young men would like to purchase new skateboards. Jimmy takes on a paper route and forgoes his weekly candy bar to earn money and reduce his expenses for the purchase. Tommy companies bitterly to anyone within earshot about how the price, and writes a letter to the company president. "If the folks who made the wheels didn't charge so much, I could afford a new skateboard".
Thanks!
If negotiating a sales contract equates to pressure, than possibly. However, in this case, the request for component price reductions appears to be predicated solely on one company's perceived need to be more competetive with another company. And in this case, with the component manufacturer footing the bill.
I think they call it business. You can bet 1 billion dollars that Apple competes for the best price and capacity for manufacturing and yes suppliers may get squeezed. That is business and its doubtful Apple is running a charity.
Yes Apple will also be able to reduce prices. However, Apple's market is the above 1000$ market. The pc makers have the sub 1000$ market. So even though all prices will come down, it is important for pc makers to get below the 1000$ level EVEN if Apple's prices come down as well.
Yeah, but since Apple has retired the low-end MacBook line, they can cut the price on the Air if they need to without fear of cannibalizing sales.
From what I've read, it seems that Tim Cook was the missing piece that Apple needed to compete on price in the tech manufacturing world. And they're still able to maintain their profit margins. Apple won't be quick to cut their price until sales start slowing down and they aren't maximizing profit. I think the Air could still be very profitable at the $899 price point.
Apple is willing to compete on price when it makes sense. As evidence, I would point to the $50 iPhone 3GS.