Apple: hardware company? or software company?

I was thinking about apples business, relating to their Iphone line, after reading the breakdown of the iphone 4s, and how another article about googles takeover of motorola could allow them to become a hardware company and it discussed how apple was a software and hardware company.

And it led to me to wonder whether apple really was a hardware company in reality? I mean think about it their products are assembled by foxconn (which is common) but i cant think of a single internal component they designed or built... for instance take the new 8mp camera which is manufactured and supplied by sony. The processor is in part designed by ARM and manufactured by samsung...

I know others use parts of other companies products to lower costs but they usually manufacturer parts but can apple say the same?

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matt101101 / MOD  Oct. 15, 2011 at 22:25

They're a design company above all else, in my opinion. They make stuff pretty, then sell it at massively inflated prices; great business model if you can pull it off.

JanSt / MOD  Oct. 15, 2011 at 22:40

You got a point.
But it's a bit philosophical, isn't it? How many parts would they have to manufacture themselves to qualify? 1 or 100? There is no phone made by one company under one roof unless I'm mistaken. No laptop, car or pizza.

The engineers designing hardware for Nokia or RIM don't actually build the hardware bits. Does it matter if they leave the dirty work to the boys and girls in the basement or across the 7 seas?

Apple control Foxconn AS IF they owned it. Judging by the difference in quality between BBs made in Canada, Hungary or Mexico, RIM have less control over their own plants.

Some of Nokia's new devices are manufactured by a Chinese phonemaker, and the original Xperia was made by Htc and skinned by SPB.

Control. Quality.

Of course, as an American company Apple need to make up this smokescreen to distract from the "made by commies" logo...

Treab  Oct. 15, 2011 at 22:45

Just as an add on to your foxconn comment jan. These are foxconns known clients,

Foxconn makes consumer electronics for a number of well-known companies, including:
Acer Inc. (Taiwan) (United States)[16]
Apple Inc. (United States)[17]
ASRock (Taiwan)
Intel (United States)
Cisco (United States)
Hewlett-Packard (United States)[18]
Dell (United States)
Nintendo (Japan)
Nokia (Finland)[17]
Microsoft (United States)
MSI (Taiwan)
Motorola (United States)
Sony Ericsson (Japan/Sweden)[19]
Vizio (United States)

but with regards your initial point about how many parts i defo see your point as you could say as apple had a hand in ensuring the parts fit apples specifications, but surely to be a proper 'hardware' company i would say at least 10% of its parts should be created in house and yet apple dont seem to do that?

(and if you look this is a discussion topic not a question so philosophical is ok ;) lol)

matt101101 / MOD  Oct. 15, 2011 at 22:47

I think, of the phone companies, Samsung come closest to making their "own", devices. Take the SGS2 for example, simply because I know most about it out of Samsung's range, Samsung make the: processor, RAM, Flash memory, AMOLED screen and camera.

I guess they outsource the making of the phone's body and I'm not sure who makes the motherboard

Treab  Oct. 15, 2011 at 22:50

I gotta say it is an interesting question isn't it when is a hardware company not a real hardware company and can you be a hardware manufacturer without making a single component...

matt101101 / MOD  Oct. 15, 2011 at 23:04

So, to look at it the other way around, are Samsung and Sony, manufacturers, or suppliers, in your opinion?

Treab  Oct. 15, 2011 at 23:13

both. they produce hardware for themselves and supply to others in order to increase profit margins... take sony. the camera in the 4s has been sold a million times say they get 50 cents for each one thats 500,000 dollars... but then they probably use it in their own phones such as the ray and arc which makes them say 25 dollars a phone...

matt101101 / MOD  Oct. 15, 2011 at 23:21

I meant predominantly, what do you think? If you can class Apple as either a software or hardware company, you can class Sammy and Sony as, predominantly, either manufacturers (OEMs), or suppliers to other OEMs.

To be honest, I think you've raised a very interesting topic, on many levels. Samsung are a very interesting company, IMO. They supply lots of the vital parts for the iPhone, yet also produce, under their own name, as an Android OEM, the iPhone's biggest rival, the SGS2 and soon the Nexus Prime/Galaxy Nexus, under Google's name. They're a fantastically diverse company which a surprising amount of the tech. world relies on.

The same goes for Sony, though to a lesser extent. They make all of HTC's screens nowadays, as HTC no longer use AMOLED from Sammy. They also make a lot of mobile phone cameras, they're not as hot as Samsung in the processor dept. though.

Treab  Oct. 15, 2011 at 23:35

Tbh sony have never had a strong history in processors but then again they never needed to.

I would say most of their business will come from supplying others they know that they can produce cheap and sell loads take the camera from sony in the ifony 4s if they could produce that camera for say 25 cents and make a 100% profit margin on the camera for every one sold it sounds tiny but considering iphone will probably sell 16 million in a year that could be a reasonable 8 million dollars 4 million clear profit...

so in production terms they may make more to sell to others but in profit terms they may make more on their own devices as they can make items low (i.e. when i hear the iphone 4 costs 200 quid to make 400 to sell in reality they probably cost 100 to make due to sheer quantity).

this allows companies to make items low but at a higher risk. take the arc say sony make 25 bucks a phone but only sell half their profit could be written off as their produced product doesnt sell.

take the classic example of the play 400 quid on release very quickly down to 150.

say they make 100 off each phone at 400 but now due to held stock they may well lose out overall.

matt101101 / MOD  Oct. 15, 2011 at 23:46

I'm just going to put this out there, this is the most intelligent conversation we've ever had ;).

Sony must make more from being a supplier than an OEM, after all, lets face it, most of their Xperia range has been...crap...for want of a more intelligent term...

If Apple ship the 25 million iCraps that the analysts think they will, then Sony would make around $6 million profit, just from the camera. I've seen it estimated that Apple alone are worth, in contracts, $7 billion to Samsung in 2011. Even with them at each other's throats in court, they are still doing $7b (£4.4b ish) worth of business dealings, that's incredible. Say it costs Sammy £250 to make an SGS2 and they sell for £500, that means 250 profit per unit with 10 million sold that's only £5b turnover and £2.5b profit.

Treab  Oct. 15, 2011 at 23:55

P.s. those numbers for the camera is mine so it could well be more it maybe less. who knows lol.

but remember matt with your figures theirs local sales tax import tax resellers costs mobile providers cut (if orange payg or contract) so i would say nearer 100-150 to produce with a sale of say 250...

Treab  Oct. 16, 2011 at 00:06

Also. i've always been intelligent its just that it was soo clever you couldn't keep up with me :p

matt101101 / MOD  Oct. 16, 2011 at 00:20

Meh, my philosophic side is burned out now :p. Go get your Hero and download these apps, they're both free.
WiFi Kill
Espier Launcher (you'll love that one). Just imagine a certain company's reaction if they saw it :p.

JanSt / MOD  Oct. 16, 2011 at 10:43

To go on what Lewis calls a Jan-tangent: nope, Apple are the Tommy Hilfiger of Tech. Branding sweatshop supervisors. Amorally glorified. But same goes for all - all our beloved brands use low-wage slavery. They all pollute. They use our privacy as currency. They supply armies who engage in wars we asked them to stay the f#ck out of. Sunday mood :p

matt101101 / MOD  Oct. 16, 2011 at 11:46

Jan, all of that is very true, but imagine the astronomical cost of say an S2 or iPhone, if it was made by "western", labour with "western", minimum wage laws. No-one would buy anything tech related and technology firms would go bust, very quickly. The world is simply not sustainable with every Nation being equal, there has to be some nations that are "used", for others to prosper, it's been that way since the Vikings, if not before. The Romans did it, the British did it via colonialism, now tech and clothing (and many other companies), do it via cheap East Asian sweatshop labour.

JanSt / MOD  Oct. 16, 2011 at 12:59

True, matt, to some degree. But go back to when Nike was the "Apple" of the day. Horrific exploitation in Asia. Yet, a mere 5% of Nike's advertising budget could have paid for decent wages! Apple own more cash than the US Treasury! ;)

matt101101 / MOD  Oct. 16, 2011 at 13:40

What annoys me about Apple's exploitation, is the fact that Jobs himself once belittled the foxconn factory worker's suffering and made it sound like a bloody holiday camp. At least (not that it's by any means right), most companies just try to never mention it, rather than belittling blatant exploitation and suffering.

The sad thing is, exploitation will continue, no matter what. To develop these countries have to pander to the wants of the west, to pander to the wants of the west, they have to allow their people to be exploited and abused. There's no way these nations will ever be as prosperous as the MEDCs of this world, so they'll, for the foreseeable future, be sadly exploited by them.

JanSt / MOD  Oct. 16, 2011 at 14:11

Yes, he described Foxconn as "a holiday camp" a la Club Med... "They have a pool, a park, a cinema"... ahem, Buchenwald had a soccer pitch and pool and theatre, too! #fact

It would have been more appropriate to play the outrage card, verbally bitchslap Foxconn's "Heidrich", and then let grass grow winkwink...

Treab  Oct. 16, 2011 at 16:23

jebus... this went dark quickly... im seriously worried about you two...

JanSt / MOD  Oct. 16, 2011 at 16:41

AS per Treab - back on topic, puhleaze


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