I am a bit surpised at this. I would have thought Apple, already having manufacturing in the U.S., would have either a) moved to own GTAT, or b) at least taken possesion of equipment to build out their own factories.
As sapphire is so expensive, Apple could have saved on margin by manufacturing in-house.
I am quite surprised!
Why would Apple want to invest close to a billion to buy something that does not work, has relatively low margins, and needs a ton of R&D? Much, *much* better to invest $500mil, and get a juicy portion of the returns if it works... If it doesn't work, leave the supplier hanging in the wind and get your money back. Apple would obviously have much rather GT succeeded, but GT failing hardly even impacts Apple. The same goes for people saying Apple should buy their own semiconductor fabs. Apple doesn't enter low margin, high dollar businesses, and they shouldn't- they do a really good job at staying focused on what they are great at.
I disagree. Managed professional funds are TOTAL RIP OFFS.
Index Funds (like S&P500 index) have extremely cheap expense ratio's compared to Mutual Funds. Index funds expense ratios can be as cheap as .06%. Mutual funds are 2% or over.....every, single, year. Those fees add up quickly.
Besides the point Index Funds out perform Mutual/Managed Funds 80-90% of the time!!! So with professional fund managers you pay HIGHER FEES and get smaller returns.
Just to clarify, index funds are still mutual funds because they are made up of a conglomeration of different companies. Indexed funds are not considered to be actively managed, because they use funds that are part of a benchmark fund. However, stocks do come on and off those benchmark funds so they are managed ... it is just that the cycle is much longer. The industry makes a big differentiation because both indexed funds and actively managed funds are trying to sell a product, but they both operate under the same principle of using a mixture of stocks to spread out your risk.
This is completely contrary to Tim Cook's supply philosophy.
Apple does not manufacture components. It doesn't even do final assembly. Shortly after Tim Cook joined Apple, the company made a move to get out of manufacturing which was a money-losing exercise for Apple.
Actually, it’s still not in-house, is it? Apple’s original manufacturing and assembly was in-house. From everything I’ve heard about the facilities, they were amazing for their time, but not sustainable. Cheap labor in China, et. al. forced their hand. Any further comment on this subject would be political.
Comments
I am a bit surpised at this. I would have thought Apple, already having manufacturing in the U.S., would have either a) moved to own GTAT, or b) at least taken possesion of equipment to build out their own factories.
As sapphire is so expensive, Apple could have saved on margin by manufacturing in-house.
I am quite surprised!
Why would Apple want to invest close to a billion to buy something that does not work, has relatively low margins, and needs a ton of R&D? Much, *much* better to invest $500mil, and get a juicy portion of the returns if it works... If it doesn't work, leave the supplier hanging in the wind and get your money back. Apple would obviously have much rather GT succeeded, but GT failing hardly even impacts Apple. The same goes for people saying Apple should buy their own semiconductor fabs. Apple doesn't enter low margin, high dollar businesses, and they shouldn't- they do a really good job at staying focused on what they are great at.
I disagree. Managed professional funds are TOTAL RIP OFFS.
Index Funds (like S&P500 index) have extremely cheap expense ratio's compared to Mutual Funds. Index funds expense ratios can be as cheap as .06%. Mutual funds are 2% or over.....every, single, year. Those fees add up quickly.
Besides the point Index Funds out perform Mutual/Managed Funds 80-90% of the time!!! So with professional fund managers you pay HIGHER FEES and get smaller returns.
Look at this article here:
http://www.businessinsider.com/index-funds-beat-actively-managed-funds-2013-6
Just to clarify, index funds are still mutual funds because they are made up of a conglomeration of different companies. Indexed funds are not considered to be actively managed, because they use funds that are part of a benchmark fund. However, stocks do come on and off those benchmark funds so they are managed ... it is just that the cycle is much longer. The industry makes a big differentiation because both indexed funds and actively managed funds are trying to sell a product, but they both operate under the same principle of using a mixture of stocks to spread out your risk.
This is completely contrary to Tim Cook's supply philosophy.
Apple does not manufacture components. It doesn't even do final assembly. Shortly after Tim Cook joined Apple, the company made a move to get out of manufacturing which was a money-losing exercise for Apple.
Mac Pro?
It’s profitable again.
Actually, it’s still not in-house, is it? Apple’s original manufacturing and assembly was in-house. From everything I’ve heard about the facilities, they were amazing for their time, but not sustainable. Cheap labor in China, et. al. forced their hand. Any further comment on this subject would be political.