Apple commits corporate jujitsu against the industry

Discussion in 'Apple, Inc and Tech Industry' started by smoledman, May 20, 2012.

  1. smoledman macrumors 68000

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    #1
    Essentially buy using other companies' greed for cash against them, they end up winning. Examples being multi-year contracts with Samsung and other suppliers at huge discounts. Another would be getting exclusive access to Thunderbolt ahead of everyone else. So Apple ends up having the cutting edge technology because Samsung & Intel wanted to immediate cash grab. They end up destroying themselves with their own greed. Apple sees the long game, they don't.
     
  2. Tower-Union macrumors 6502

    Tower-Union

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    #2
    So... Apple buys huge quantities of the product that Intel and Samsung are hawking? That's not "using other companies' greed for cash against them" that's buying a**loads of their product. It's throwing around their weight against smaller competitors who also want to by from Intel/Samsung.

    :rolleyes:
     
  3. smoledman thread starter macrumors 68000

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    My point is that it's now detrimental for Samsung & Intel to be selling these massive amounts of cutting edge product to Apple.
     
  4. kdarling macrumors demi-god

    kdarling

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    #4
    Not sure how you get that.

    Semiconductor revenue wise, it'd be detrimental to Samsung and Intel if Apple bought all those chips from someone else.

    As for Samsung's phones, the reason they're not making as high a profit margin as Apple is _not_ because of chip prices (heck, they make so many phones and chips that they no doubt get a good deal as well, and the BOM on all smartphones is quite similar)... but because Apple simply commands a higher wholesale price right now.

    That's also the reason why some analysts are skittish about Apple, as their high profit margins are dependent more on product popularity and carrier subsidies than any part price advantage.
     
  5. G51989, May 20, 2012
    Last edited: May 20, 2012

    G51989 macrumors 68030

    G51989

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    #5
    How does Intel lose out selling to Apple? That makes no sense. Apple has NO choice besides Intel. No one, not at all.

    No one competes with Intel. AMD competes in the low end market. And thats it, Intel is the king of processor quality and performance. No one is a threat to them.
     
  6. vvswarup macrumors 6502a

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    #6
    I don't know what you're implying here but if you are in anyway calling Apple anticompetitive for buying in large volumes, I get only one thing to say to you: "It's called business."

    Apple has built a business that generates massive amounts of cash flow. They have a problem that every of its competitors would love to have: Too much demand, to little supply. Apple buys a**loads of components in order to have enough product to meet that demand. A side effect, no doubt a welcome one for Apple, is that competitors' margins get squeezed and/or they can't get enough components to make enough of their product.
     
  7. vvswarup macrumors 6502a

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    #7
    You are correct about that Apple benefits from having a popular product as well as carrier subsidies. However, I disagree with your claim that those two are all that Apple has going for it and there is no part price advantage. Apple is rumored to leverage its cash hoard to purchase large quantities of components. This practice enables Apple to negotiate for a discount on component price. Look at from suppliers' point of view. They get a large order from Apple which keeps business going. And I don't think anyone has any doubt over Apple's creditworthiness.
     
  8. roadbloc macrumors G3

    roadbloc

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    #8
    Deep bro. Deep.
     
  9. boss.king macrumors 68040

    boss.king

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    #9
    I think you misunderstand business. Apple isn't suddenly going to not depend on these companies, they're coming back to buy more stuff year after year. Samsung, Intel, and the rest aren't giving this stuff away, they're selling it at a profit. You seem to have this idea that for one company to do well the others must do poorly, when in fact these companies are actually all operating successfully at the same time.
     
  10. G51989 macrumors 68030

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    #10
    No its not, Apple for example, NEEDS Intel. AMD isn't an option as they've been lagging in pretty much everything besides video cards. The best processors are Intel. Simple as that, Apple needs Intel more than Intel Needs Apple, if Apple drops Intel, they can still sell to the rest of the entire computing world. And they will.

    Samsung, sells a ton of stuff to Apple, and if one of the few suppliers that can handle the amount of material that Apple needs.

    Samsung and Intel sell all of this stuff at a good profit to Apple.

    Apple is not a threat to Intel, or Samsung. Apple doesn't have the abilty to make processors, or memory, or video cards, or monitor panels, or its own motherboards, ect ect ect ect.
     
  11. smoledman thread starter macrumors 68000

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    #11
    No Intel & Samsung need Apple far more then Apple needs them. Remember Apple is sitting on $110 billion cash, probably 4x as much as those companies put together. Apple could open up their own screen/memory/semiconductor fabs.
     
  12. thekev macrumors 604

    thekev

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    #12

    They buy relative to their uses. We've all read about how Apple can tweak production volume from week to week. If they're buying it, they're most likely using it rather than acting as a distributor.

    They wouldn't. They'd buy out others rather than starting from the bottom, as it's not really an area where they have experience. This is also in line with what they've done in the past. I doubt we'll see them buy a foundry. The manufacturing side doesn't seem to be their thing.
     
  13. G51989 macrumors 68030

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    #13
    110 Billion cash is not enough to Buy a company like Samsung, Intel is valued at around 115 Billion. Apple would have to buy all the stock, and assets of either company to purchase it. Samsung is valued at around 150 Billion.

    Apple doesn't have the cash on hand to buy either.

    Why does Intel need Apple so bad? Apple makes up less than 10% of the home computer Market, Intel could lose Apple as a Customer and be fine. Samsung doesn't need Apple to keep them afloat either.

    Apple cannot open up their own screen/memory/processor fabs. They have zero experience. They'd have to buy out other companies, and the biggest Memory/Chip makers aren't for sale. ( which atm are Samsung and Intel ), and Apple can't afford to buy them.

    There's a lot of overhead with manufacturing, and a whole list of problems to deal with it, its far easier for most companies to sub contract that stuff out, thats why you don't see Apple making its own DVD drives in the same way that Dell doesn't make their own hard drives, its easier just to buy/sub contract if your a vendor like Apple or Dell.
     
  14. maflynn Moderator

    maflynn

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    #14
    Umm no

    Intel sells a lot of CPUs/components to other manufacturers and Samsung is more then just a chip supplier. While both benefit greatly from apple's business they can survive and be profitable w/o apple.

    Just because they could open a fabrication plant doesn't mean they'd be any good at it. Its outside of their expertise
     
  15. Tower-Union macrumors 6502

    Tower-Union

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    #15
    We are agreed here, I'm saying Apple buying large volumes of product and putting the squeeze on other companies isn't "ju-jitsu" or in any way caused by other companies greed - its just smart business practices by Apple.
     
  16. G51989, Jun 2, 2012
    Last edited: Jun 2, 2012

    G51989 macrumors 68030

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    #16
    It isn't so much smart business, as its just common sense.

    Apple needs massive quantity of parts for its iPads, iPhones, computers and so forth. So, they go to companies like Samsung and Intel who sell those parts at a Profit to Apple. Don't think Apple is " squeezing " companies like Samsung or Intel, they don't need Apple. They are selling these parts at a good profit margin to Apple.

    Apple gets parts, Intel and Samsung and whoever get money. Everyones happy.

    I don't think people realize Samsung makes more than electronics.

    Example:

    [​IMG]

    Lol
     
  17. vvswarup macrumors 6502a

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    #17
    The fact that Samsung makes many other products besides electronics means nothing. Samsung's margins aren't that great on components. Think about it. It's a capital-intensive business. There is a big risk of excess capacity which will hurt profits alot. While Samsung isn't losing money, Samsung isn't making money hand over fist on components.
     
  18. G51989 macrumors 68030

    G51989

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    #18
    That's not totaly what I was getting at, yes. The profit margin's arent huge. But trust me, they do just fine.

    To many people have kind of a " Samsung/Intel/Whoever " needs Apple to survive. And I don't understand why anyone would think that.
     

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