>What we have seen with China is that if manufacturing leaves eventually R&D and design will start to leave too.
Yep, Apple et al. are reaping what they sow here. All their employees go find suppliers in Asia for their hardware. The travel schedules are so grueling that you basically have to be from the country/province where the supplier is located for it to be a tolerable job (free trips home!). So basically, we have Asian engineers seeking out Asian suppliers on behalf of an American company where only the top few levels are American. The chance those Asian engineers are going to cut out the American company in 10 years is high.
I know plenty of western-born people making regular trips to China and in charge of sourcing. Not sure where this claim is coming from but it doesn’t feel grounded on the reality I observed first hand. You realize Apple has something like 50k employees in the Bay Area. There’s very large teams responsible for hammering out the deals and engineering teams responsible for finding suppliers.
I think this statement is, in general, completely true. But it doesn't actually seem to apply to Apple, which continues to design many aspects of the iPhone. In part this is because Apple essentially funds and builds many of the factories it "outsources" to, which very few companies can afford to do.
This is an important point. When hon hai builds the plant they have to capitalize it over 40 years or so (per whatever the local equivalent of GAAP is). For Apple it’s a current expense. Now most companies would prefer the longer capitalization period (it will increase earnings) but but with apple’s huge cash reserves and almost by definition nothing better to invest them in than Apple growth, this lets them take advantage of the investment right away, then move elsewhere if the numbers look better.
What does capitalization over 40 years mean? They amortize plant costs over 4 decades? That sounds crazy because in this industry I would assume a plant would need to be completely retooled every 2-3 years.
Sorry, that was poorly written out. Under GAAP the building itself would typically have to be amortized for decades. A lot of the physical plant would need a lot of explanation to justify a short amortization period too (although not 40 years!) given that plenty of decades old plants still churn out chips at large node size. And There is, as I mentioned, an asymmetry in accelerating vs deferring the expense in terms of sector-specific stock market perception.
But I was lazy in conflating the two cases so thanks for pointing that out.
Just realized that while the ARM transition makes technical sense it probably increases the odds of Apple being commodified. Using X64 makes it at least somewhat harder for a competitor to do this by offering competitors fewer choices and higher component costs.
By pushing the PC, the nucleus of all development, to ARM they are helping push the whole software industry onto a heavily globalized platform with many vendor choices and generally available IP.
I assume it’s the double justification for Apple’s marketing to have chosen the phrase “Apple silicon”. One of course is to steer the discussion away from the ARM architecture itself and any sense of commoditization. This was a problem with the intel transition, though they were in a tighter situation so simply didn’t message around it ... and that was fine.
The second justification though is that the CPU architecture is less significant on the system scale. The SOC really is a ”system” (we used to predict this in the 1990s but couldn’t get there then) with a lot of other some what specialized functional units designed to work together.
In that the A series are more reminiscent of the mainframes of old, where the CPU really was merely the central processing unit and a tremendous amount of processing went on in other processing units.
What wasn’t commodified to begin with about the PC industry? Or later, with the smartphone industry? There’s Apple and then there’s the commodity alternative with more market share globally etc.
To me this is Apple trying to stay ahead of ARM Chromebooks and the desktop-ification of Android/Chrome. If left alone another half decade, it’s possible that Chromium via either Google or Microsoft could have made more of a dent in the wider market than just education uses. Adobe is already facilitating creatives to cheaper Windows workstations.
Frankly, Apple investing in unique silicon for their software simply means it will be more unique, just as the iPad has defended its place through an unbeatable software ecosystem and “cheap enough” hardware. If the Mac can go “cheap enough” to iPad pricing, this is Apple carving out its niche and market for the decade to come...
To me this is Apple trying to stay ahead of ARM Chromebooks and the desktop-ification of Android/Chrome.
Right. ChromeOS is getting interesting. At first glance it seems to be even more limited and appliance-like than iOS, but now you can run both Android and Linux software in containers, which opens up many more potential uses.
Yep, Apple et al. are reaping what they sow here. All their employees go find suppliers in Asia for their hardware. The travel schedules are so grueling that you basically have to be from the country/province where the supplier is located for it to be a tolerable job (free trips home!). So basically, we have Asian engineers seeking out Asian suppliers on behalf of an American company where only the top few levels are American. The chance those Asian engineers are going to cut out the American company in 10 years is high.