vvswarup

Is it a coincidence that this report is coming out around the time that Apple reported earnings that were a mixed bag and Tim Cook guided a first ever drop in iPhone sales?

sog35 said:

auxio said:

Why in the world would Apple want to have to develop for and test iOS on hundreds of devices which are being built as cheaply and quickly as possible (with little regard for quality)?  They'd end up turning into Microsoft -- stuck in the quagmire of supporting cheap hardware and unable to move forward because of it.

I not looking at this from Apple's perspective or that they should do this.

I'm just wondering how much people would be willing to pay for iOS software.

I think an option for Apple is to start a secondary brand. They should call it Peach. But they won't be responsible for building/selling the hardware. They would simply license iOS to this hardware company. They could sell these Peach phones for $250-$300 in Africa, Eastern Europe, South America, ect. It would run a light version of iOS (sort of like what the older iPhones run now). Eventually many of these Peach buyers will upgrade to the real deal Apple. Its sort of like a Toyota/Lexus thing. But the good part is all the risk would be on the hardware company building these phones, and not Apple.

Every time I read one of your comments, I feel even happier that you're not in charge of Apple. Apple's business model is based on being that caliber of company that people are willing to pay a premium for its products. That business model has helped Apple earn as much or more profit in a quarter than what Google manages to earn in a whole year. 

The types of people who would be interested in a $250-$300 smartphone are the price-conscious buyers. Why would the they ever upgrade to the "real deal Apple?" If people find value at $250-$300, what killer features would the "real deal Apple" have to make them pay a premium for it?

tele1234 said:

Putting aside the fact the guy is a colossal bigot, what's wrong with trying to encourage bringing industry home?

It's stupidly idealistic to say have it done 100% by tomorrow, but something like "50% USA-based profit has to come from USA-manufactured goods by 2023" or something is more realistic, and impose a tax penalty for those that don't - the proceeds of which go towards aiding in funding US-based manufacturing.

First of all, Foxconn doesn't manufacture anything. Foxconn ASSEMBLES the iPhone. The distinction is very important. Manufacturing involves taking raw materials (e.g. steel) and creating a component out of it. Companies all over the world MANUFACTURE the the individual components that go into the iPhone. They're shipped to Foxconn, which takes those components and assembles them. 

Apple doesn't own any production factories. Apple pays component manufacturers to build them to its specifications. The company has no choice but to simply go wherever the best manufacturer is located. If the best manufacturer can't be found in the USA, it's not Apple's fault. Apple has sourced things from American manufactures before. If GT Advanced had worked out, it would have been a great partnership. 

Show me what Apple can do to "bring manufacturing home" when it doesn't own any of that manufacturing. 

I completely agree with some of the points in the article. Google has spent far more R&D than Apple, yet Google remains married to search/advertising. It's not a problem of insufficient resources. It's that Google is scatterbrained. It lacks the discipline needed to turn that R&D into a product/service that can generate cash. Apple hasn't spent as much as Google but it has generated far more profit and cash flow from its R&D. But somehow, Wall Street has chosen to reward Google's profligacy not only with a high valuation but also unchallenged power for its founders.

With that said, this article is reaching for news. It is making a mountain out of a molehill. When a company buys out another, the acquirer agrees to assume most of the target's obligations. The $42 million contract simply happened to be one of the obligations that Google incurred as a result of the acquisition. It was determined that the proposed robot concept was not feasible, end of story. While it is true that Google is good at outlining grandiose, pie-in-the-sky ideas but barely mediocre at delivering on a fraction of that blue sky, the results of this contract don't support that conclusion in any way. To use this contract smacks of third-rate journalism. 

dave marsh said:

brakken said:

Even without checking, I knew this was DED. I love your work!
I am stunned that anyone takes Alphabet-Google seriously at all, any more. 
The only other company that gets such a huge free pass is MS, and they are being consumed by their own lack of taste, too.
I wouldn't be surprised if the anti-encryption people were being financed by these two lame and disgusting companies.

In the meantime, The Macalope wrote a fun article about Apple's foibles. I recommend it!

Don't forget Amazon.  They plow all their profits back into growing the company, and Wall Street loves it, giving them an astronomical P/E ratio of something over 900, compared to Apple's 12.

Wall Street's love affair with Amazon is based on a misguided belief that the more a company spends on R&D, the more innovative the company is. This asinine notion forms the entire basis for the idea that Apple is not investing in its future at all and is just milking the profits of the iPhone. 

R&D does cost money but in the end, a company has to deliver. That R&D has to lead to eventually lead to a revenue stream. Amazon has been saying for 20 years that it expects to lose money as it invests in its future. 20 years later, for all that spending, Amazon should be crushing Apple in revenue growth at least. Apple earns twice as much as Amazon yet still manages to show higher percentage growth rates. Maybe I'll be proven wrong and it's only a matter of a few years before Apple's financials sink to the bottom of the ocean while Amazon will triple, quadruple, and quintuple its growth and it will earn ten times as much as Apple. At least that's what investors think.