Tim Cook: Component Cost Breakdowns on Apple Products Are Nowhere Close to Being Accurate

[bmc205]

so you don't consider these 'apple parts'?

YouTube: video

YouTube: video​

No, I don't consider this an Apple part for one simple reason: It's not made by Apple. Again, plain and simple, Apple does not manufacture anything and there is no such thing as an "Apple part". They have OEM suppliers do the manufacturing of components and they contract additional companies to put all those parts together for them.

I own a small independent Apple repair shop. I know the insides of Apple devices like the back of my hand. I can assure you that there is no such thing as an Apple part, just parts that are made for Apple to their specific specs, quality, and performance standards.

----------

I would call hiring someone to build a product part to your custom specifications being YOUR part. Apple isn't buying parts off the shelf. Besides, manufacturing includes putting all those parts together, plus the packaging design and manufacturing and any licensing fees required to be able to use other people's patents right down to fonts and images.

I never claimed that Apple is buying parts off the shelf. Just because they aren't stock parts doesn't mean that they are Apple is manufacturing the parts. Plain and simple, there is no such thing as an "Apple part". LG makes a lot of their various display panels. Yes, they are made to Apple very specific specs as well as quality and performance standards, but it's still an LG part after the part is manufactured. There are any number of other OEM's that do the same thing for every other component that is used in an Apple device. You mention that manufacturing includes putting all the parts together....well, Apple doesn't do that either. They contract companies like Foxconn to do it for them.



----------

What about the custom designed logic boards and iPhone processor?

Not manufactured by Apple. Manufactured for Apple by an OEM.

The S1 in the Watch?

Not manufactured by Apple. Manufactured for Apple by an OEM.

Lightning cables?

Not manufactured by Apple. Manufactured for Apple by an OEM.

Seeing a trend?

Also doesn't manufacturing include the cost of putting the bag of parts together?

Even if it does, this still isn't done by Apple. Apple contracts companies like Foxconn and Pegasus to put their devices together.

----------

Who do you think designed and paid for the machines and processes that manufacture the actual finished devices?

Sure, Apple's contract with the company gave them necessary funding to purchase and/or design manufacturing equipment. Still doesn't change the fact that Apple does not manufacture their own components.

----------

So who's part is this?

Yet another example of a part that Apple paid an OEM to make for them. Apple did not manufacture that part themselves.

 

[CRizzy]

For as long as I can remember, people seem to think R&D is free.

Well... It's free for the people who rip Apple off in China. People say "Oh look, these Chinese knockoff's are getting better and they're cheaper". Yeah no ****, if all they have to do is copy Apple and not invest in R&D of course it'll be cheaper, they're spending less on it than Apple.

 

[ZCT]

Yeah, extremely successful yet they still use ultra cheap, almost slave labor when they could easily provide thousands upon thousands of great jobs right here in the USA which we desperately need. But, the psychopathic, never happy big shareholders are eternally miserable so it can't happen.

No one cares what the bosses or CEOs make when the workforce is taken care of properly. Like it used to be in this country. Oh well.

I can only follow your rant so far ;-)

See it would be nice to think that Apple could set up a nice little factory near that space ship they are making, and build all their products right here in the good ole US of A. But that is not reality.

When Apple ramps up production for a new product like the Apple Watch, iPhone and so on, they are able to summon a massive army of highly skilled people willing to work like crazy for long hours, low pay, and even sleep on site and be up the next day after a few hours of sleep to do it all again.

American workers would not accept the pay, the conditions, the intense attention to detail and minimal margin for error. But even if they would, there simply aren't enough Americans with that skill set.

If we built iPhones in America, the wait times would make this Apple Watch launch seem like a walk in the park. It just couldn't be done.

 

[T-R-S]

Apple has stopped charing for all OS upgrades - as those cost Apple big time.
Yes Apple is strong profitable company and they don't have to rely on Microsoft bailouts anymore.

 

[clibinarius]

The difference was that by switching to ARM v8 Apple was able to leapfrog everyone else in terms of performance, and enable a lot more powerful applications for mobile devices, particularly games. As for buying technology, it was there for the taking. They saw an opportunity that others passed on.

I'm not convinced the everyday user of the device notices much benefit to the chip. If so, companies would be falling over themselves to get some equivalency; they're not. This year will finally be the first year a majority of iPhone users probably will have a 64 bit chip-assuming iPhone 5C sales fall off the face of the planet. How could the chip be used fully with such limited penetration in terms of marketshare?

 

[KPOM]

I'm not convinced the everyday user of the device notices much benefit to the chip. If so, companies would be falling over themselves to get some equivalency; they're not. This year will finally be the first year a majority of iPhone users probably will have a 64 bit chip-assuming iPhone 5C sales fall off the face of the planet. How could the chip be used fully with such limited penetration in terms of marketshare?

Qualcomm said that Apple caught everyone off guard, including them. 64-bit wasn't even on the consumer radar when Apple released the 5s. Now everyone is racing to get a 64-bit chip. It is a boon for gamers.

 

[laurim]

No, I don't consider this an Apple part for one simple reason: It's not made by Apple. Again, plain and simple, Apple does not manufacture anything and there is no such thing as an "Apple part". They have OEM suppliers do the manufacturing of components and they contract additional companies to put all those parts together for them.

I own a small independent Apple repair shop. I know the insides of Apple devices like the back of my hand. I can assure you that there is no such thing as an Apple part, just parts that are made for Apple to their specific specs, quality, and performance standards.

----------



I never claimed that Apple is buying parts off the shelf. Just because they aren't stock parts doesn't mean that they are Apple is manufacturing the parts. Plain and simple, there is no such thing as an "Apple part". LG makes a lot of their various display panels. Yes, they are made to Apple very specific specs as well as quality and performance standards, but it's still an LG part after the part is manufactured. There are any number of other OEM's that do the same thing for every other component that is used in an Apple device. You mention that manufacturing includes putting all the parts together....well, Apple doesn't do that either. They contract companies like Foxconn to do it for them.



----------



Not manufactured by Apple. Manufactured for Apple by an OEM.



Not manufactured by Apple. Manufactured for Apple by an OEM.



Not manufactured by Apple. Manufactured for Apple by an OEM.

Seeing a trend?



Even if it does, this still isn't done by Apple. Apple contracts companies like Foxconn and Pegasus to put their devices together.

----------



Sure, Apple's contract with the company gave them necessary funding to purchase and/or design manufacturing equipment. Still doesn't change the fact that Apple does not manufacture their own components.

----------



Yet another example of a part that Apple paid an OEM to make for them. Apple did not manufacture that part themselves.

I honestly don't see your point. It still costs a lot of money to hire someone else to make your parts, especially considering that other company needs to get a profit. Apple doesn't want to build a multitude of manufacturing plants for all their products. Considering how secretive they are about their products, there must be a really important financial reason to not build EVERYTHING in-house. For one, the overhead would be outrageous. Two, every time they use a new material they would have to build yet more factories vs simply finding someone who already does it and knows how to do it. Designing something in-house and then hiring someone else to produce it is a perfectly legit way for a company to produce THEIR parts and MANY companies do it, especially for electronics. Only YOU have a semantic issue with it, probably because you work in a fixit shop and not in corporate product design for a major company. The DESIGN of a part makes it an Apple part, not the address of the brick building where it was made. The fact that no one else can have the part in their product makes it an Apple part.

 

[clibinarius]

Qualcomm said that Apple caught everyone off guard, including them. 64-bit wasn't even on the consumer radar when Apple released the 5s. Now everyone is racing to get a 64-bit chip. It is a boon for gamers.

But has it demonstrated its actual abilities and use yet? Again, with penetration so limited, I have a skepticism that 64 bits are useful (yet) in masse. I believe it just pushed forward the road map. Of course, that's good for consumers in the long run. I'm not sure how differently I rate it than screen sizes...