Re:Apple Books TSMC’s Entire 5nm Production Capability
by hinkley on Saturday September 19, 2020 @08:55PM
(#24531273)
It's interesting the ways we qualify 'fairness' when talking about capitalism.
In practice, I suspect these sorts of situation arise far more frequently than we think. One party overpays for a supply of an ingredient and then controls demand by leveraging it. In the first act, they convince people that they need things made with this ingredient. In the second, they bank on the cachet, the exclusivity, driving demand even higher.
But at the end of the day, someone is playing a chess match where in theory the customer could have had more options and now they don't. Or they could have had no options at all. We don't have a time machine so who can say?
Apple went farther in a number of situations by investing in suppliers in order to guarantee that they could produce an ingredient in the first place, either at all, or in a timely fashion. We are going to enable you to make a product, and then we are going to ask for special treatment for having done so.
Which means, for instance, that Intel may be able to field an equivalent ultralight notebook using the same supplier, but Apple made higher profit margins on the same product (although the manufacturer makes higher profits on the Intel version).
I don't have any illusions that they will continue with this level of benevolence in the future, especially after Tim (or indeed even as Tim's memory of Steve fades). I don't even know if they are still working that way now. Probably not, or not for long.
At any rate, R&D frequently is paid for by luxury goods of one form or another.
Like it or not, Apple is nearly the only luxury computing maker out there, though Samsung, Sony and LG dabble. I've expressed my confusion on a number of occasions as to why things are this way, given that it's not the case with cars or a number of other goods. I like Apple products and am an investor, but I'd also like to have more opportunities to compare them to a competitor. Hyundai has figured out they need a separate luxury brand, as have a number of car makers before them. Maybe Sony, Samsung and LG need their own 'Genesis', 'Audi', "Acura".
My last example was not a case of 'poor Intel, can't sell because of a licensing agreement'. They were probably wiping their tears away with 100 dollar bills. TSMC is probably pretty happy with this arrangement too. The way they 'get out' of this exclusivity is to produce more chips than Apple cares to buy, since it's probably Right of First Refusal, not 'you can make no more than N million chips per month or else'.
In practice, I suspect these sorts of situation arise far more frequently than we think. One party overpays for a supply of an ingredient and then controls demand by leveraging it. In the first act, they convince people that they need things made with this ingredient. In the second, they bank on the cachet, the exclusivity, driving demand even higher.
But at the end of the day, someone is playing a chess match where in theory the customer could have had more options and now they don't. Or they could have had no options at all. We don't have a time machine so who can say?
Apple went farther in a number of situations by investing in suppliers in order to guarantee that they could produce an ingredient in the first place, either at all, or in a timely fashion. We are going to enable you to make a product, and then we are going to ask for special treatment for having done so.
Which means, for instance, that Intel may be able to field an equivalent ultralight notebook using the same supplier, but Apple made higher profit margins on the same product (although the manufacturer makes higher profits on the Intel version).
I don't have any illusions that they will continue with this level of benevolence in the future, especially after Tim (or indeed even as Tim's memory of Steve fades). I don't even know if they are still working that way now. Probably not, or not for long.
At any rate, R&D frequently is paid for by luxury goods of one form or another. Like it or not, Apple is nearly the only luxury computing maker out there, though Samsung, Sony and LG dabble. I've expressed my confusion on a number of occasions as to why things are this way, given that it's not the case with cars or a number of other goods. I like Apple products and am an investor, but I'd also like to have more opportunities to compare them to a competitor. Hyundai has figured out they need a separate luxury brand, as have a number of car makers before them. Maybe Sony, Samsung and LG need their own 'Genesis', 'Audi', "Acura".
My last example was not a case of 'poor Intel, can't sell because of a licensing agreement'. They were probably wiping their tears away with 100 dollar bills. TSMC is probably pretty happy with this arrangement too. The way they 'get out' of this exclusivity is to produce more chips than Apple cares to buy, since it's probably Right of First Refusal, not 'you can make no more than N million chips per month or else'.