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Outsourcing doesn't mean off the shelf. Apple still works with third parties to manufacture parts as they can leverage the scale of their overall operations to
by omeid2 2y ago
Outsourcing doesn't mean off the shelf. Apple still works with third parties to manufacture parts as they can leverage the scale of their overall operations to do it cheaper than it would cost apple to do.
- Retric 2y agoThey aren’t just working with from a design or quality control standpoint that’s normal enough, they are also purchasing equipment for 3rd party companies to use which isn’t. At this point they need to be world class experts in everything from batteries, sensors, software, and processors to glass. Tesla does some stuff in house because they can, but they just didn’t have any options when it came to scaling battery production. They hit the limits of what the market could supply without getting directly involved.
- omeid2 2y agoWhy are these companies going so far as purchasing equipment for 3rd parties instead of doing it in house?
- Retric 2y agoSeveral reasons, both from Apples perspective and the supplier’s. Suppliers don’t want to purchase a bunch of equipment and scale their manufacturing capacity for a contract that could go away at any time. So when Apple shows up they are going to price that risk in to their bid or sometimes just outright say no. However, by Apple buying that equipment those risks suddenly get reduced. Apple on the other hand has huge cash reserves and isn’t that price sensitive. Plus they want to avoid all the issues bring yet another component in house.
- omeid2 2y agoThat is a long way of saying "economy of scale".