3 ms·
"That’s (Apple stores) advantageous, because if the iPad were primarily sold at third-party retail stores, a big chunk of profit would go to those retailers, Hi
by netcan 16y ago
"That’s (Apple stores) advantageous, because if the iPad were primarily sold at third-party retail stores, a big chunk of profit would go to those retailers, Hiner reasons."
"Designing in-house means Apple doesn’t have to pay licensing fees to third parties to use their intellectual property. For instance, the A4 chip"
This is silly. Software development, retail, chip design etc. all cost money. Apple isn't just taking Bets Buy's cut, it's taking its risk and its costs. Same for chips, software, etc. Actually it's more risky and costly in many ways. If the chip turned out to be good but not ideal for iPads they're not going to go find a different market for it. Apple stores aren't free to cash in on whatever popular high margin non-Apple widget people are buying this season.
Vertically integrating obviously works well for Apple, but saying that Apple is able to sell iPads @ $500 because of it is missing the point. You now just have to explain what makes apple good at retail, software, chip design, etc.
- wisty 16y agoiOS development was already paid for by the iPhone and iPod teams, as was chip design. And the App store and iTunes are a benefit, not a cost. However I agree, there are other reasons - their outsourcing of components has a very good reputation.
- hessenwolf 16y agoThere is a bit of a contradiction. It cannot be both great that Apple doesn't outsource its retailing and great that Apple outsources its components production. Economically, it should buy from the cheapest and most efficient source all it requires. If best buy are more efficient retailers, then Apple should use them; but I think there are some advertising advantages to their stores.
- gabrielroth 16y ago"It cannot be both great that Apple doesn't outsource its retailing and great that Apple outsources its components production." Why not? Outsourcing isn't always good or always bad. Economically, Apple should do the things it can do well (software, design, retail) and outsource the things it can't do any better than anyone else (component production, assembly).
- hessenwolf 16y agoI think we are saying the same thing, and I just did not say it well. My problem with the statement I quoted is that it is unconditioned on efficiency.