HTC had the first large screen phones, and then only because apple was buying up all the smaller screens
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Tim Cook: Component Cost Breakdowns on Apple Products Are Nowhere Close to Being Accurate
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HTC had the first large screen phones, and then only because apple was buying up all the smaller screens
You read a lot into things. As to not insult you, directly, or indirectly, I'm not going to dissect your statements.
Unless you want to take this to PM and yield publicly, once I explain things in a way you'll understand?
huh? it's a public forum. not sure why anything you or i have said would need to be continued in private.. it's on topic.
This is not how contract manufacturing usually works. In Apple's case, I really don't know.
Most of the time, a contract is agreed upon and the bill is paid according to the terms. In my manufacturing experience, I rarely pay before my items are in my hands. Chinese companies usually want the money up front but Apple has buying power, trust and history, so they probably do terms. Apple needs leverage over charge backs (defective units being returned), so having terms is in their best interest. Think light bleed, defective units (in general, scratches and just plain lack of QC, in some cases.
I'm sure they have a very good relationship though.
Apple doesn't own the equipment. Not sure where you got this idea from? Foxconn owns the equipment. Mainly, a bleep-ton of CNC machines and probably some casting and injection molding machines. You won't find this equipment on Apple's inventory list. I'm sure they help pay for it but they don't own it, not outright. I don't mind being corrected, if you have a citation.
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Ok.
Do you have experience with mass-producing parts in Asia, specifically China? I do.
How can you compare custom wood-work with mass produced parts by automated machines and Chinese workers, earning about $2/day (I forget the actual rate)?
ETA: http://www.businessinsider.com/china-labor-watch-apple-iphone-workers-2013-7
Do you mass-produce 10's of thousand of your wood products?
If Apple is given dimensions on, say the waterproof speaker, in the Apple Watch, they can adjust the case to accommodate the speaker or they can order enough, so that the manufacturer will augment the design, to fit in Apple's design envelope. This is one way. The most economical.
The other way, is for Apple to reinvent the wheel (that speaker) and make the design 100% custom... Which will cost a considerable amount more but will still use a product from a Chinese company.
I'm just wondering how you can compare your job to something of a scale of millions or units. Scale and location of manufacture drives the price way down. Communist manufacturing and labor, paired with millions of units, makes things ridiculous cheap.
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That's quite the generalization to make while also oversimplifying the process of bringing a product to market and then selling it.
Apple actually helps manufacturers in financing equipment, developing new processes, so there is a development cost in manufacturing that's not included in the production cost itself.
I'm really interested to know why the stainless steel band costs $450?
That's just insulting.
the moment I heard that price,I lost my (little) interest in Apple watch altogether.
That's just insulting.
the moment I heard that price,I lost my (little) interest in Apple watch altogether.
Come on, calling bigger screen innovation... Are you serious? Even NFC? NFC were already used in payment many years before. Your whole thing is kind of funny! Samsung is good at innovating in the Fab area, they are excellent at that; but their "innovations" on the phone are quasi nonexistent.
no.. each piece is unique.. though i have built in asia a few times
well.. i thought the sub-topic was R&D.. not mass production.
much of the R&D -- specifically the D part.. doesn't even happen in asia
further, the design is a 'product' in and of itself.. it's not an equation such as "ok, soandso spent 1000 hrs developing this idea and he/she makes $100/hr.. therefore we spent $100,000 on design... we expect to sell 1m units so that means each unit will be 10¢ for design fee"
the design is everything.. that's what's being sold.. make a sweet enough design and charge, say, $10 for design for every unit.. or $50.. add in some good marketing and watch the money roll in.
[edit] or does D not even stand for design?
if not.. i still think the design element is included under the whole R&D umbrella.. right?
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I was talking just about R&D with real numbers. So don't see how i can make a generalization.
The £379 strap
http://store.apple.com/uk/product/MJ5J2/42mm-link-bracelet £379 and:
I haven't sought detailed information about that cutting process. Is it:
a) each cutting machine limited to no more than one link at a time; or
b) each machine capable of concurrently cutting multiple links of a single width?
For economy and other reasons, I hope that (b) is true.
Either way, I would not find £379 appealing.
http://store.apple.com/uk/product/MJ5J2/42mm-link-bracelet £379 and:
"… nearly nine hours to cut the links for a single strap. …"
I haven't sought detailed information about that cutting process. Is it:
a) each cutting machine limited to no more than one link at a time; or
b) each machine capable of concurrently cutting multiple links of a single width?
For economy and other reasons, I hope that (b) is true.
Either way, I would not find £379 appealing.
no.. not really.. i've never looked specifically at apple competitors numbers.
just what i've gathered as typical net profits from all sorts of different types of industries i have relationships with (from restaurants to retail to manufacturers) are in the 10-20% range.. the iffy or variable number is the admin % different businesses use.. it's not profit per se but it's generally where salaries are coming from.
apple reports 38% gross margins.. it appears to earn around 20some% net profit.. a nice chunk of that mystery 16% is probably headed this way -->
https://www.apple.com/pr/bios/
Just to add to this foxconn makes motherboards, etc. under their own name plus they make stuff for other companies. It would be ridiculous to think apple pays for the equipment foxconn uses to do everyone's stuff, including their own. If apple owned the equipment it would be an apple plant, not a foxconn one. I'm surprised the cheerleaders are not claiming cook is running the machines himself.
no.. not really.. i've never looked specifically at apple competitors numbers.
just what i've gathered as typical net profits from all sorts of different types of industries i have relationships with (from restaurants to retail to manufacturers) are in the 10-20% range.. the iffy or variable number is the admin % different businesses use.. it's not profit per se but it's generally where salaries are coming from.
apple reports 38% gross margins.. it appears to earn around 20some% net profit.. a nice chunk of that mystery 16% is probably headed this way -->
https://www.apple.com/pr/bios/
The last time I looked at that page Dr. Dre was there. I wonder why he isn't now? I can't remember his title or if Jimmy Iovine was there too.
A quick search shows Google and Microsoft in the 22% net range too.
Agreed on R&D and other indirect costs. I think that's what Tim's talking about here.
It's actually not too tough to guess on what Apple might be paying for something like NAND or camera modules. There's a lower bound on what they COULD possibly be paying for the product -- the component cost to the supplier. Obviously since they are buying in such enormous quantities, the suppliers will have much lower margins, but if you have an accurate should cost model on the components themselves, or if you know the current margins for the suppliers, you can get a pretty accurate estimate.
It was right after the Beats deal was finalized and it was announced that they were getting positions at Apple. Someone here linked to it at the time.
For as long as I can remember, people seem to think that R&D costs are somehow included in the gross margin.
No. Gross margin is what allows R&D (and marketing, and Tim Cook's salary, and other non-manufacturing expenditures) to be paid. Gross margin is price minus manufacturing & parts cost.
So if Apple sells 20 million Watches at an average GM of $150, that's $3 billion to repay the R&D and other non-manufacturing costs, most of which were speculatively expended well before the first Watch even shipped.
"small details" is a far cry from revolutionizing a product. The difference between the iPad and tablets that came before it aren't small details. You have a fundamental misconception of either "revolutionize" or "small details" or both.
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What you just said equates to higher profit margins that their competitors, which is exactly what I was eluding to.
Actually Apple does own an enormous amount of manufacturing equipment including CNC mills-- tens of thousands of them.
From what I've read, they tend to focus their purchasing on strategic equipment. I'd doubt they own many wave-soldering machines, for example, as those are commonplace and a commodity item. But high-quality/high-throughput CNC machines are strategic to them (and have been since the earliest unibody MacBooks), so they made sure to establish their primacy for them.
Similarly, they have written billion-dollar checks for fabs operated by others, such as Samsung in Texas.
Um, how about looking at their yearly profits compared to revenue and amount of cash on hand.....that's a pretty clear indicator that they are pulling way more profitable than other CE companies or any of the industries I listed.