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by jmclnx 682 days ago
The article makes sense to me. Apple has such a large marketing clout, they are able to set the prices.

So prices are so low, they can only be made using boarderline slave labor.

4 comments

> Apple has such a large marketing clout

I think their products are genuinely competitive. It's not just marketing.

I was a Windows and Linux user for nearly two decades before really giving Mac an shot, and still engage regularly with both. My first smartphones were Android. I’ve done tons of development work on both the iOS and Android platforms, and been exposed to a mountain of devices from both.

As far as I’m concerned nobody’s even trying to compete with Apple. There are other personal computing products but none of them address the same market as Apple at all. The tiny set of possible competitors for their space all seem to have decided not to even try.

[edit] and, to be clear, I’d very much prefer that they had competition in their segment. Even if I stuck with them, it’d at least put competitive pressure on them to improve and/or cut prices.

That's a weird look. What is that market segment nobody is even trying to compete in?

Integrated ecosystem is something a number of players have tried and failed at, as they simply don't have the resources to build it up and sustain it until they are competitive.

Apple has started small too: tiny little iPods with iTunes + digital content sales really put them back on the map, before they scored a hit with iPhone which was an iPod touch with a modem. They have been riding the iPhone wave since, gobbling up money with iPhone and iPad manufacture and app sales, which allowed them to expand to SoC production for laptops too, which is what got them back on the PC (as in "personal computer") map too.

> iPhone which was an iPod touch with a modem.

I mean, that's not totally wrong, but by the release dates completely backwards. The iPod Touch is an iPhone without the modem.

Sure, iPod touch was not much of a difference maker, and I am likely misremembering the dates.
You also missed that Macs were becoming pretty popular before iPhones existed. There were multiple reasons for this but the timeline is nowhere near as simple as you portrayed it.
Agreed.

I wasn't that impressed with Android long ago, but decided to give it another look last year when I helped a family member buy a top of the line phone.

Android is still not comparable.

Of course, it all depends on what the end user is looking for, but at least for overall quality of Apple phones is higher both in hardware and software.

Are we buying the same devices? Apple hardware is notoriously expensive.
The article suggests Apple is using its buying power to push component prices down, so that it can keep more of the profit on its expensive smartphones for itself.
I appreciate you and the other commenter for correcting me, thank you. That makes much more sense.
Apple can set prices for their vendors/suppliers.
Apple is getting 50%+ profit off of their phones. Not sure their other device categories, but it's probably similar especially with their relentless streamlining of the internals. Moving iPad and all their computers to the same chip family (and manufacturing maybe 2 generations at a time with little overlap), for instance, gives them a substantial (potential) savings across all those product lines due to the combined scale.
Apple makes 35.3% gross margin on products, per their latest earnings call. Transcript here: https://sixcolors.com/post/2024/08/this-is-tim-q3-2024-analy...

While they make a gross margin of 46.3% overall, that’s mostly buoyed by the high margin on services, not on the products.

Sounds like the tech version of Walmart killing the small town. Except they kill American “tech manufacturing” or whatever you want to call it.

It’s 100% about borderline slave labor pay. I used to think it was because chip manufacturing is very nasty but I think it’s both pay and subpar working conditions.

> Except they kill American “tech manufacturing” or whatever you want to call it.

This is the part I don't understand... they have placed orders with the new fabs that aren't even built yet. How are they killing American manufacturing if there is no American manufacturing for them to buy from?

And it's not just isolated factories. There is a whole ecosystem of interrelated manufacturing & assembly companies that you would have to transplant to the US.

And I keep hearing that there are hundreds of thousands of people working on iPhone assembly. I can't even imagine how long it would take to replicate such a workforce in the US. Wages aside, this seems to be rather exacting, meticulous work with limited paths of advancement. Where are these laborers going to come from?

As Steve Jobs is reported to have told Barack Obama in 2010: "These jobs are not coming back".

It’s political theater. The tide is swaying towards US fabs. What about the past 15+ years? The capability is gone for a lot of it.

As Obama put it, “Those jobs aren’t coming back”.