19 ms·

No, You Can’t Manufacture That Like Apple Does

225 points by brk 12y ago

noir_lord 12y ago
$12 for a box at scale, well damn! Use 100% recycled cardboard and print the box in a single color water based bio-degradable ink. Then claim you do this to save the environment, win-win ;).
- herge 12y ago
  That's how Amazon packages its kindles.
  - pkulak 12y ago
    That's how they package everything that's "frustration free". Their packaging has actually gotten very good in the last several years. They use recyclable air bags for fill, and even their tape now is paper so you can recycle the whole box as one material.
    - cdr 12y ago
      "Very good" in terms of minimizing packaging maybe... not always so good when it comes to actually protecting contents. The air bags are sometimes not so good at keeping heavier items from crushing lighter ones, especially when shipping in a box that's 3x larger than the combined volume of what's inside. And for awhile now I've had books ship loose with other items instead of shrinkwrapped to cardboard like they used to be, leading to mangling. Amazon is good about replacing damaged items and I'm sure they build the cost into their decisions, but the hassle and waste is still kind of annoying.
- jkestner 12y ago
  Packaging is a product to be designed unto itself, especially as what you're usually ultimately selling is an experience. I think I've seen people rave about packaging I've designed as much as the products. And just like the product itself, manufacturing experience helps you hit a better price/performance note, all the way down to making boxes that fit in a certain USPS weight class which you can slap a mailing label on.
  - alistairSH 12y ago
    I find packaging to be a very mixed bag, emotionally speaking. While I like the higher-end treatment from Apple and similar companies, I can't help but think of the waste involved in producing that fancy box that I'm just going to throw away in a few days. And Apple doesn't need the fancy packaging to sell to me - I'd but their stuff regardless. I wonder if they could/would consider generic cardboard for online orders, and save the fancy stuff for retail?
    - jkestner 12y ago
      They do that for refurbs. It's just another design challenge. For a great experience, you don't need to spend a lot of money on packaging - just have an element of surprise and thoughtfulness. That can be done in cardboard and smart graphic design, or even off-the-shelf packaging used in a different context (see: T-shirt in a can).
taylodl 12y ago
Thanks to follow-up research after reading this article I now know what an ejector pin mark is, and now that I know I see them everywhere! Gah!
- zuck9 12y ago
  I didn't understand even after minutes of googling. Can you summarize it?
  - amoonki 12y ago
    This is what I got from my googling: Plastic parts are often made by pouring hot plastic into a mold. When the plastic is done drying, often a robotic arm or crane needs to pull it off to bring the plastic to the next stage of the manufacturing process. But it's hard to get the plastic off the surface once it's dried; it needs to be "popped" off of it. So manufacturers build ejector pins into the mold. When the plastic is done drying, the pins pop up and push the plastic off the mold, into the crane or whatever will take it to the next part of the operation.
    - Aqua_Geek 12y ago
      And when the pins hit the plastic part to pop it off, they often leave small, circular marks on it.
mgkimsal 12y ago
It's pretty much the same in software too. I often get requests for functionality and when I say "no, we can't do that", I get "Why not? Amazon does it". Hrmm... Amazon has dozens of people working and supporting just that one feature. You're trying to engage me to do an entire project. On a fixed budget. With a fixed time frame. And you've changed your mind 3 times in the last 3 weeks on key points. Of course, yes, there are amazing things you can do with software that weren't remotely feasible even just 5 years ago. But there's always a moving target - the market leaders (Apple, Google, Amazon, etc) are constantly pushing the boundaries of what's considered 'normal', and most people have 0 idea of the real cost and effort involved in having the functionality come across as polished and error free as the big boys.
- bsaul 12y ago
  Reminds me of the many times someone tells me "oh you're developping apps ? I've got a great idea : ". 9 times out of 10 this idea involves rebuilding google search engine and facebook, plus a third thing on top.
  - felixthehat 12y ago
    http://howismyappidea.com http://howismyappidea.com
    - swoker 12y ago
      Damn, I seriously expected something like a vote system
      - bad_user 12y ago
        A voting system wouldn't get it right in 99.9% of the cases.
    - frandroid 12y ago
      Why can I not give you a bounty here like on Stack Overflow?
ashish01 12y ago
Then how did Nest do it?
- jeffreyrogers 12y ago
  They came from Apple and had money.
  - saalweachter 12y ago
    And their products are absurdly expensive (for the market). You don't notice for the thermostat, but their smoke detectors are $100 when the carbon monoxide smoke detector it is replacing is $20.
- jonknee 12y ago
  They were rich former Apple staff that created a luxury item (it was 10x the price of other thermostats) and still were smart enough to not require CNC or matched white plastics or even a fancy box.
- dpark 12y ago
  Nest doesn't do most of these things. > White plastic No. > CNC machining at scale I'd be shocked if they CNC machined any piece of the nest. There's no need. > Laser drilled holes Nope. > Molded plastic packaging I guess they did this. They probably had the experience and money to pull this off. > No ejector pin marks Not relevant because there is no exposed plastic. > 4-color, double-walled, matte boxes + HD foam inserts Nope.
- nikcub 12y ago
  They hired the brilliant Bould[0] design for ID and partnered with a Tier-1 Taiwanese ODM for manufacturing[1]. This takes a bit of money, connections and being able to demonstrate you will have volume. What the article doesn't mention is that you can manufacture in Apple's wake. After Apple started purchasing 4" touch panels and LCD displays for iPhones, and then larger displays for the iPad, the capacity increased and prices went down. Same with all the CNC machines purchased for the iPhone 4 frame - they are no longer being used to manufacture Apple devices, but they are being used to manufacture other devices. Second part is that modern manufacturing tech means you can have lean hardware startups. As much as cheap hosting, software as a service, etc. have made software app development cheaper manufacturing tech has made hardware manufacturing cheaper. You can now get rolling with complete custom hardware in thousands of units (as opposed to millions) with 6-figures in capital. The key is knowing one of the small number of people who understand design, materials, the capabilities at the ODM's, the right people at these companies, supply chain etc. and have them design the product to fit the current manufacturing capacity without requiring customization. It is easy to hire an industrial designer sitting ten thousand kilometers away from Shenzhen who can CAD something nice, but knowing that manufacturing that fancy designed device would cost extra millions in tooling and setup is where the real skill is. Good ID people can design great products and in a way where they can be manufactured easily and with a smaller investment. If you don't have one of these people on your team, your either going to get something that is very ordinary looking (think Chinese knockoff) or you'll attempt something ambitious, run out of money and fail. What Nest did is use clever ID to create a product that looked unique without over-stretching the manufacturing requirements. They didn't go anywhere near the scale Apple does. [0] http://www.bould.com/ http://www.bould.com/ [1] not certain which, but it is 3-4 possible companies.
snowwrestler 12y ago
Surprising statement that the box might be the most expensive single element of the iPhone.
- yourad_io 12y ago
  I don't see that anywhere. Closest thing I could find is: > 4-color, double-walled, matte boxes + HD foam inserts > I know you’re going to do this anyways, but be aware that these kind of boxes will literally be the most expensive line item on your BOM. It’s not unusual for them to cost upwards of $12/unit at scale. And then they get thrown away. ...which is talking about your costs, not Apple's. Please correct me if I've missed something.
  - shubb 12y ago
    Iphone BOM can here: http://cdn.ihs.com/Technology/SharePointImages/PublishingImages/Press%20Releases/2012-09-25_iPhone5.jpg http://cdn.ihs.com/Technology/SharePointImages/PublishingIma... $12 is a lot of money for a box, and would be one of the most expensive things you buy, unless you want the latest communications chipset or next years display technology. I guess apple do. But it's still a lot of money for a box. News to me.
    - drone 12y ago
      The double-wall material seems to be the primary driver of that price, and also not necessary for most products. I've designed and purchased a lot of retail boxes for my needs. If you can get away with a heavy-duty paperboard (which will suit most non-luxury products), the combination of full-color box and custom foam can be had as low as $5/unit, or less, in quantities starting at 500 units. Once you start getting into custom multi-wall product, you're often having to pay die costs which greatly drive up the per-unit price.
  - jcampbell1 12y ago
    I agree that he didn't say that. The 4 color boxes are what apple ships computers in. The iphone is shipped in: > Many small Apple products come in polycarbonate + ABS/PC mix molded packaging. This is both harder and more expensive than you might think. Recycled cardboard is your friend I always assumed the iphone packaging was polystyrene. I am pretty sure it is, and I think the author is wrong. Of course the S in ABS is polystyrene, but my limited knowledge is that ABS is never clear in any formulation.
deleted 12y ago
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whizzkid 12y ago
This article actually misses some key points while it is telling the truth. Most of the things mentioned in the article is correct BUT, If you are going to make a product and you think that your product is going to be as revolutionary as Apple was at the beginning, then don't worry. You will be good to go. If you can provide a unique, mind blowing product just like Apple Lisa in 1983, you can sell it for really unrealistic prizes. Apple Lisa was sold for US$ 9,995 at the time it was released. You could buy a new house around $86000. So the question is not how expensive is going to be, the real question is, Is your product mind blowing?
- wmf 12y ago
  Wasn't Lisa a flop?
  - informatimago 12y ago
    No. Perhaps financially, accountants weren't able to attribute black pennies to it. But spiritually it was a big success. Everybody wanted one. And it was the roots of the Macintosh. If Apple didn't do the Lisa, I cannot see what else they could have done at that time, and still become the biggest company of the world 30 years later. Without it, they would probably have disappeared long ago as so many people predicted.
    - philwelch 12y ago
      They buried almost the entire production run in Utah, didn't they?
- philh 12y ago
  > If you are going to make a product and you think that your product is going to be as revolutionary as Apple was at the beginning, then don't worry. You will be good to go. I would disagree with this, but keep quiet, if you removed "you think". As it is, the advice just seems irresponsible. If you think your product is going to be as revolutionary as Apple was at the beginning, you are probably wrong, and you should adjust your expectations accordingly.
zwieback 12y ago
Not mentioned is the challenge of managing a good CM in China or Malaysia. If you're small you get what everyone else does, at higher prices. If you're huge you can groom your CM and make sure you get what nobody else does, at a lower cost. Of course sooner or later the manufacturing knowledge leaks out so it's a rat race even for someone like Apple.
foofoo55 12y ago
The main point is that manufacturing, especially high-volume, consumer, apple-quality products, is very hard and requires serious expertise. Such startups should bring in such mechanical & production engineering expertise, because the hardware becomes as important as the software & electronics. The irony is that many software startup wizards brush off mechanical design the same way that naive managers treat software development. "It's just a [box/case/app/website], how hard can it be?"
- digitailor 12y ago
  You have summarized the perfect take-away from this article. Disclosure for bias: I am the 4th generation of an American manufacturer, that has survived for 100 years in New York City. Of the hundreds of retail startups I have seen that are going to contract manufacturers, none have had a manufacturing expert or even one with any experience. In fact, it's severely undervalued with respect to importance. If they do have someone from manufacturing, they probably aren't being paid relative to their market scarcity. The best manufacturers also design what they make, their own product, and do not make for others. Apple has manufacturing experts and manufactures themselves, hence they control what they make. <startup-person class="random inexperienced" /> does not, so they cannot have their quality level, by definition. Hence, they pay more because they didn't capture the margin, and because they have to get in line to pay a contractor who knows how. But they cannot bring a serious order unless they are funded by deep pockets. Here in America, we have lost most of our manufacturers, leaving three generations missing manufacturing experts. This is a no-brainer, obvious to all. However, the connection is rarely made that we have lost our manufacturing capability because /it is difficult/. It's so difficult it had to go to a highly efficient country with cut-throat competition, abundant labor supply, and abundant poverty. The perfect conditions for plunging down manufacturing costs. Manufacturing is quite different from "making." We are having a resurgence of interest in making in this country, which is exceptional. Arduino is amazing! It manufactures for the people, not for other companies, reducing cost and providing access. Making doesn't scale without manufacturing expertise. I hope manufacturing is part of the renaissance as it grows.
  - serge2k 12y ago
josefresco 12y ago
Forget fancy techniques, just scale alone is enough to shock you when looking into manufacturing. We got quotes from various providers at $4-$12/part. Meanwhile, in grocery stores, department stores, even dollar stores we would see similar products (using the same materials) being sold for $1-2. The difference is mostly related to the number of parts being ordered. For a startup, ordering 100,000+ parts just to get pricing reasonable is a no-go unless you (or your backers) take a major risk. Makes you feel like getting off the ground is almost impossible, when you can't even get your wholesale cost below the retail cost of similar products.
- jkestner 12y ago
  You can live with it - it should just guide your product strategy. Moves that Tesla used with the Roadster: - Start with the high end/low volume market. - Minimize custom parts. - Architect a completely different approach to change the cost equation. (Throw software at the problem instead of hardware.)
  - sedachv 12y ago
    > Architect a completely different approach to change the cost equation. (Throw software at the problem instead of hardware.) I'll bite: what does that sentence even mean? How did Tesla "architect" a different approach to the "cost equation" of manufacturing, sourcing, and assembling the parts of an automobile? What are they "throwing" software at?
    - jkestner 12y ago
      This one's a looser fit to Tesla. Better examples might be anything that replaces a built-in touchscreen with your smartphone's. In Tesla's case, by going all-electric they were able to make a drastically simpler drivetrain (and sure, this in some ways contradicts the previous point). I think that resulted in a much better cost-for-performance than a startup would've been able to get building around a combustion engine.
- lkrubner 12y ago
serve_yay 12y ago
The more you know this sort of thing the harder it becomes to believe that Apple makes the same things everyone else does but with fancy marketing.
- lotsofmangos 12y ago
  Their attention to detail in casings is the same as the very high end hi-fi, jewelery, or sports-car industries. Nobody else in computing seems to come close. In terms of electronic components however, you can nearly always get more bang for your buck, the exception sometimes being the screens.
  - tptacek 12y ago
    That might be true of computers, but how true is it of mobile devices? A handheld mobile device isn't even conceptually a single computer; it's a small network of computers.
    - lotsofmangos 12y ago
      I think it still is true in mobile, but in mobile the general computing components just need to be good enough not to lag, build quality and interface elements are the things to buy on with laptops, tablets and mobiles. Doesn't matter if you have a powerful gizmo if the hinges are broken and it overheats, however with PC's you can buy a high-end motherboard and find a power supply in a skip and just nail them to the wall if you like. Build quality is far more optional.
  - Igglyboo 12y ago
    Yep, a fully specced macbook pro costs around $2500. I'm betting you can get the same specs at around $1000 - $1500 from someone else. What you won't get is the insanely nice display and build quality. You'll likely get a shitty 1080p or less display and a plastic chassis.
- wmf 12y ago
  All I needed to stop believing that was to hold an Apple product in one hand and a competing one in the other. Whether you care about fit and finish is a matter of personal taste, but the difference is visible.
psychometry 12y ago
There are so many acronyms in this article that aren't defined. Maybe I'm not the intended audience for this article, but it's pretty hard to understand when you don't know what CM, CNC, or BOM mean. Is it really so hard to use the <abbr> tag?
- mcooley 12y ago
  CM = Contract Manufacturer CNC = Computer Numerical Control (an automated mill) BOM = Bill of Materials (a parts list) It is jargon, but it's jargon that someone who would be concerned about "not showing ejector pin marks" would probably know.
ww520 12y ago
Build a Facebook lite for such and such...
qwerta 12y ago
Article does not mention capacitive touch screens. Apple basically build its own factories (and subsequently entire industry) to manufacture for iphone 1.
- wmf 12y ago
  But now it's a commodity.
- sedachv 12y ago
  > Apple basically build its own factories (and subsequently entire industry) to manufacture for iphone 1. Are there any articles or book sections about this? Seems very interesting.
- joezydeco 12y ago
  Capacitive screens are petty much custom for whatever the end applicaton is. Apple pretty much bought out the market for CNC laser ablation machines used in this line of work.
deleted 12y ago
[deleted]
lazylizard 12y ago
but apple is not the only large luxury goods manufacturer, right? how does louis vuitton do their thing? or leica? or rolex? if anything, aren't lv and rolex the orginals at mass producing/marketing luxury goods? separately, i imagine not just leica, but the entire optics industry has answered the question of precision/quality at scale before? and finally, there're more , right? like mercedes-benz, bmw, lexus, porsche, medical instruments, the aerospace industry... don't all of them have to solve 'quality at scale' problems? and at smaller scales..parker pens? zippo lighters? swiss army knives? and then..something like http://www.muji.us/store/ http://www.muji.us/store/ could be good enough as far as the perception of quality goes?
- pduan 12y ago
  Yea, none of those companies are startups. As for volume, they aren't shipping millions upon millions of their devices in a month either.
- frankchn 12y ago
  I think the idea is that most of those companies are large (compared to a 10 person startup) and have manufacturing expertise, which most start-ups may not have. Even companies like Parker Pens are part of large companies -- (e.g. Parker is part of Newell Rubbermaid with 19,000 employees and almost $6 billion in revenue).
  - lazylizard 12y ago
    actually parker was founded in 1888 and was independent until 1993 when gillette bought it. i imagine they didn't need gillette's help to scale their manufacturing.. i think there're plenty of small firms, from furniture makers to knive makers to bicycle makers to audio equipment makers, that do quality at low volumes. i'd imagine a startup is exactly that - low volume. and they could probably figure out how to scale when they need to? its a good problem to have, right? i'm thinking of a car analogy.. its like.. i can't imagine that porsche, when they first launched the 911, were thinking about how to make 100000 of them a year.. or for that matter, a more recent example like koenigsegg or even tesla..they didn't exactly start with a 100000/year plant either..
eitally 12y ago
This is why -- for example -- Flextronics opened their Lab IX [1] in SV last year. In cases where hardware ideas are good ones, it makes a lot of sense for the guys with the manufacturing expertise to get in the loop early on. They can incubate, invest, and indulge in some of the wild stuff innovators want but can only be executed with $mm of equipment. [1] http://www.labix.io/ http://www.labix.io/
niels_olson 12y ago
Aren't turbine blades also grown from crystal before machining? Even Apple doesn't do that...
at-fates-hands 12y ago
When did Apple go from manufacturing ordinary hardware to making that leap where they had the financial resources to truly make something incredibly unique and beautiful? Was it one product one year, or did happen over a span of years where they had smaller increments of change? I'm curious to know how a company can get to a point and say, "Ok, we can do something really cool, on a massive scale and make it successful." Is a slower transition, or more of an abrupt change that takes place?
- wtallis 12y ago
  It was definitely a gradual thing. As early as the "Snow White" design language introduced in 1984, Apple was pushing the limits of conventional computer manufacturing techniques. And they didn't go from beige boxes to unibody aluminum slabs in one step.
DarkIye 12y ago
Seriously? Most founders' ideas hinge on their hardware product looking sleek? This is progress?

225 points by brk 12y ago

$12 for a box at scale, well damn! Use 100% recycled cardboard and print the box in a single color water based bio-degradable ink. Then claim you do this to save the environment, win-win ;).

herge 12y ago
That's how Amazon packages its kindles.
- pkulak 12y ago
  That's how they package everything that's "frustration free". Their packaging has actually gotten very good in the last several years. They use recyclable air bags for fill, and even their tape now is paper so you can recycle the whole box as one material.
  - cdr 12y ago
    "Very good" in terms of minimizing packaging maybe... not always so good when it comes to actually protecting contents. The air bags are sometimes not so good at keeping heavier items from crushing lighter ones, especially when shipping in a box that's 3x larger than the combined volume of what's inside. And for awhile now I've had books ship loose with other items instead of shrinkwrapped to cardboard like they used to be, leading to mangling. Amazon is good about replacing damaged items and I'm sure they build the cost into their decisions, but the hassle and waste is still kind of annoying.
jkestner 12y ago
Packaging is a product to be designed unto itself, especially as what you're usually ultimately selling is an experience. I think I've seen people rave about packaging I've designed as much as the products. And just like the product itself, manufacturing experience helps you hit a better price/performance note, all the way down to making boxes that fit in a certain USPS weight class which you can slap a mailing label on.
- alistairSH 12y ago
  I find packaging to be a very mixed bag, emotionally speaking. While I like the higher-end treatment from Apple and similar companies, I can't help but think of the waste involved in producing that fancy box that I'm just going to throw away in a few days. And Apple doesn't need the fancy packaging to sell to me - I'd but their stuff regardless. I wonder if they could/would consider generic cardboard for online orders, and save the fancy stuff for retail?
  - jkestner 12y ago
    They do that for refurbs. It's just another design challenge. For a great experience, you don't need to spend a lot of money on packaging - just have an element of surprise and thoughtfulness. That can be done in cardboard and smart graphic design, or even off-the-shelf packaging used in a different context (see: T-shirt in a can).

taylodl 12y ago

Thanks to follow-up research after reading this article I now know what an ejector pin mark is, and now that I know I see them everywhere! Gah!

zuck9 12y ago
I didn't understand even after minutes of googling. Can you summarize it?
- amoonki 12y ago
  This is what I got from my googling: Plastic parts are often made by pouring hot plastic into a mold. When the plastic is done drying, often a robotic arm or crane needs to pull it off to bring the plastic to the next stage of the manufacturing process. But it's hard to get the plastic off the surface once it's dried; it needs to be "popped" off of it. So manufacturers build ejector pins into the mold. When the plastic is done drying, the pins pop up and push the plastic off the mold, into the crane or whatever will take it to the next part of the operation.
  - Aqua_Geek 12y ago
    And when the pins hit the plastic part to pop it off, they often leave small, circular marks on it.

mgkimsal 12y ago

It's pretty much the same in software too. I often get requests for functionality and when I say "no, we can't do that", I get "Why not? Amazon does it". Hrmm... Amazon has dozens of people working and supporting just that one feature. You're trying to engage me to do an entire project. On a fixed budget. With a fixed time frame. And you've changed your mind 3 times in the last 3 weeks on key points. Of course, yes, there are amazing things you can do with software that weren't remotely feasible even just 5 years ago. But there's always a moving target - the market leaders (Apple, Google, Amazon, etc) are constantly pushing the boundaries of what's considered 'normal', and most people have 0 idea of the real cost and effort involved in having the functionality come across as polished and error free as the big boys.

bsaul 12y ago
Reminds me of the many times someone tells me "oh you're developping apps ? I've got a great idea : ". 9 times out of 10 this idea involves rebuilding google search engine and facebook, plus a third thing on top.
- felixthehat 12y ago
  http://howismyappidea.com http://howismyappidea.com
  - swoker 12y ago
    Damn, I seriously expected something like a vote system
    - bad_user 12y ago
      A voting system wouldn't get it right in 99.9% of the cases.
  - frandroid 12y ago
    Why can I not give you a bounty here like on Stack Overflow?

ashish01 12y ago

Then how did Nest do it?

jeffreyrogers 12y ago
They came from Apple and had money.
- saalweachter 12y ago
  And their products are absurdly expensive (for the market). You don't notice for the thermostat, but their smoke detectors are $100 when the carbon monoxide smoke detector it is replacing is $20.
jonknee 12y ago
They were rich former Apple staff that created a luxury item (it was 10x the price of other thermostats) and still were smart enough to not require CNC or matched white plastics or even a fancy box.
dpark 12y ago
Nest doesn't do most of these things. > White plastic No. > CNC machining at scale I'd be shocked if they CNC machined any piece of the nest. There's no need. > Laser drilled holes Nope. > Molded plastic packaging I guess they did this. They probably had the experience and money to pull this off. > No ejector pin marks Not relevant because there is no exposed plastic. > 4-color, double-walled, matte boxes + HD foam inserts Nope.
nikcub 12y ago
They hired the brilliant Bould[0] design for ID and partnered with a Tier-1 Taiwanese ODM for manufacturing[1]. This takes a bit of money, connections and being able to demonstrate you will have volume. What the article doesn't mention is that you can manufacture in Apple's wake. After Apple started purchasing 4" touch panels and LCD displays for iPhones, and then larger displays for the iPad, the capacity increased and prices went down. Same with all the CNC machines purchased for the iPhone 4 frame - they are no longer being used to manufacture Apple devices, but they are being used to manufacture other devices. Second part is that modern manufacturing tech means you can have lean hardware startups. As much as cheap hosting, software as a service, etc. have made software app development cheaper manufacturing tech has made hardware manufacturing cheaper. You can now get rolling with complete custom hardware in thousands of units (as opposed to millions) with 6-figures in capital. The key is knowing one of the small number of people who understand design, materials, the capabilities at the ODM's, the right people at these companies, supply chain etc. and have them design the product to fit the current manufacturing capacity without requiring customization. It is easy to hire an industrial designer sitting ten thousand kilometers away from Shenzhen who can CAD something nice, but knowing that manufacturing that fancy designed device would cost extra millions in tooling and setup is where the real skill is. Good ID people can design great products and in a way where they can be manufactured easily and with a smaller investment. If you don't have one of these people on your team, your either going to get something that is very ordinary looking (think Chinese knockoff) or you'll attempt something ambitious, run out of money and fail. What Nest did is use clever ID to create a product that looked unique without over-stretching the manufacturing requirements. They didn't go anywhere near the scale Apple does. [0] http://www.bould.com/ http://www.bould.com/ [1] not certain which, but it is 3-4 possible companies.

snowwrestler 12y ago

Surprising statement that the box might be the most expensive single element of the iPhone.

yourad_io 12y ago
I don't see that anywhere. Closest thing I could find is: > 4-color, double-walled, matte boxes + HD foam inserts > I know you’re going to do this anyways, but be aware that these kind of boxes will literally be the most expensive line item on your BOM. It’s not unusual for them to cost upwards of $12/unit at scale. And then they get thrown away. ...which is talking about your costs, not Apple's. Please correct me if I've missed something.
- shubb 12y ago
  Iphone BOM can here: http://cdn.ihs.com/Technology/SharePointImages/PublishingImages/Press%20Releases/2012-09-25_iPhone5.jpg http://cdn.ihs.com/Technology/SharePointImages/PublishingIma... $12 is a lot of money for a box, and would be one of the most expensive things you buy, unless you want the latest communications chipset or next years display technology. I guess apple do. But it's still a lot of money for a box. News to me.
  - drone 12y ago
    The double-wall material seems to be the primary driver of that price, and also not necessary for most products. I've designed and purchased a lot of retail boxes for my needs. If you can get away with a heavy-duty paperboard (which will suit most non-luxury products), the combination of full-color box and custom foam can be had as low as $5/unit, or less, in quantities starting at 500 units. Once you start getting into custom multi-wall product, you're often having to pay die costs which greatly drive up the per-unit price.
- jcampbell1 12y ago
  I agree that he didn't say that. The 4 color boxes are what apple ships computers in. The iphone is shipped in: > Many small Apple products come in polycarbonate + ABS/PC mix molded packaging. This is both harder and more expensive than you might think. Recycled cardboard is your friend I always assumed the iphone packaging was polystyrene. I am pretty sure it is, and I think the author is wrong. Of course the S in ABS is polystyrene, but my limited knowledge is that ABS is never clear in any formulation.

deleted 12y ago

[deleted]

whizzkid 12y ago

This article actually misses some key points while it is telling the truth. Most of the things mentioned in the article is correct BUT, If you are going to make a product and you think that your product is going to be as revolutionary as Apple was at the beginning, then don't worry. You will be good to go. If you can provide a unique, mind blowing product just like Apple Lisa in 1983, you can sell it for really unrealistic prizes. Apple Lisa was sold for US$ 9,995 at the time it was released. You could buy a new house around $86000. So the question is not how expensive is going to be, the real question is, Is your product mind blowing?

wmf 12y ago
Wasn't Lisa a flop?
- informatimago 12y ago
  No. Perhaps financially, accountants weren't able to attribute black pennies to it. But spiritually it was a big success. Everybody wanted one. And it was the roots of the Macintosh. If Apple didn't do the Lisa, I cannot see what else they could have done at that time, and still become the biggest company of the world 30 years later. Without it, they would probably have disappeared long ago as so many people predicted.
  - philwelch 12y ago
    They buried almost the entire production run in Utah, didn't they?
philh 12y ago
> If you are going to make a product and you think that your product is going to be as revolutionary as Apple was at the beginning, then don't worry. You will be good to go. I would disagree with this, but keep quiet, if you removed "you think". As it is, the advice just seems irresponsible. If you think your product is going to be as revolutionary as Apple was at the beginning, you are probably wrong, and you should adjust your expectations accordingly.

zwieback 12y ago

Not mentioned is the challenge of managing a good CM in China or Malaysia. If you're small you get what everyone else does, at higher prices. If you're huge you can groom your CM and make sure you get what nobody else does, at a lower cost. Of course sooner or later the manufacturing knowledge leaks out so it's a rat race even for someone like Apple.

foofoo55 12y ago

The main point is that manufacturing, especially high-volume, consumer, apple-quality products, is very hard and requires serious expertise. Such startups should bring in such mechanical & production engineering expertise, because the hardware becomes as important as the software & electronics. The irony is that many software startup wizards brush off mechanical design the same way that naive managers treat software development. "It's just a [box/case/app/website], how hard can it be?"

digitailor 12y ago
You have summarized the perfect take-away from this article. Disclosure for bias: I am the 4th generation of an American manufacturer, that has survived for 100 years in New York City. Of the hundreds of retail startups I have seen that are going to contract manufacturers, none have had a manufacturing expert or even one with any experience. In fact, it's severely undervalued with respect to importance. If they do have someone from manufacturing, they probably aren't being paid relative to their market scarcity. The best manufacturers also design what they make, their own product, and do not make for others. Apple has manufacturing experts and manufactures themselves, hence they control what they make. <startup-person class="random inexperienced" /> does not, so they cannot have their quality level, by definition. Hence, they pay more because they didn't capture the margin, and because they have to get in line to pay a contractor who knows how. But they cannot bring a serious order unless they are funded by deep pockets. Here in America, we have lost most of our manufacturers, leaving three generations missing manufacturing experts. This is a no-brainer, obvious to all. However, the connection is rarely made that we have lost our manufacturing capability because /it is difficult/. It's so difficult it had to go to a highly efficient country with cut-throat competition, abundant labor supply, and abundant poverty. The perfect conditions for plunging down manufacturing costs. Manufacturing is quite different from "making." We are having a resurgence of interest in making in this country, which is exceptional. Arduino is amazing! It manufactures for the people, not for other companies, reducing cost and providing access. Making doesn't scale without manufacturing expertise. I hope manufacturing is part of the renaissance as it grows.
- serge2k 12y ago

josefresco 12y ago

Forget fancy techniques, just scale alone is enough to shock you when looking into manufacturing. We got quotes from various providers at $4-$12/part. Meanwhile, in grocery stores, department stores, even dollar stores we would see similar products (using the same materials) being sold for $1-2. The difference is mostly related to the number of parts being ordered. For a startup, ordering 100,000+ parts just to get pricing reasonable is a no-go unless you (or your backers) take a major risk. Makes you feel like getting off the ground is almost impossible, when you can't even get your wholesale cost below the retail cost of similar products.

jkestner 12y ago
You can live with it - it should just guide your product strategy. Moves that Tesla used with the Roadster: - Start with the high end/low volume market. - Minimize custom parts. - Architect a completely different approach to change the cost equation. (Throw software at the problem instead of hardware.)
- sedachv 12y ago
  > Architect a completely different approach to change the cost equation. (Throw software at the problem instead of hardware.) I'll bite: what does that sentence even mean? How did Tesla "architect" a different approach to the "cost equation" of manufacturing, sourcing, and assembling the parts of an automobile? What are they "throwing" software at?
  - jkestner 12y ago
    This one's a looser fit to Tesla. Better examples might be anything that replaces a built-in touchscreen with your smartphone's. In Tesla's case, by going all-electric they were able to make a drastically simpler drivetrain (and sure, this in some ways contradicts the previous point). I think that resulted in a much better cost-for-performance than a startup would've been able to get building around a combustion engine.
lkrubner 12y ago

serve_yay 12y ago

The more you know this sort of thing the harder it becomes to believe that Apple makes the same things everyone else does but with fancy marketing.

lotsofmangos 12y ago
Their attention to detail in casings is the same as the very high end hi-fi, jewelery, or sports-car industries. Nobody else in computing seems to come close. In terms of electronic components however, you can nearly always get more bang for your buck, the exception sometimes being the screens.
- tptacek 12y ago
  That might be true of computers, but how true is it of mobile devices? A handheld mobile device isn't even conceptually a single computer; it's a small network of computers.
  - lotsofmangos 12y ago
    I think it still is true in mobile, but in mobile the general computing components just need to be good enough not to lag, build quality and interface elements are the things to buy on with laptops, tablets and mobiles. Doesn't matter if you have a powerful gizmo if the hinges are broken and it overheats, however with PC's you can buy a high-end motherboard and find a power supply in a skip and just nail them to the wall if you like. Build quality is far more optional.
- Igglyboo 12y ago
  Yep, a fully specced macbook pro costs around $2500. I'm betting you can get the same specs at around $1000 - $1500 from someone else. What you won't get is the insanely nice display and build quality. You'll likely get a shitty 1080p or less display and a plastic chassis.
wmf 12y ago
All I needed to stop believing that was to hold an Apple product in one hand and a competing one in the other. Whether you care about fit and finish is a matter of personal taste, but the difference is visible.

psychometry 12y ago

There are so many acronyms in this article that aren't defined. Maybe I'm not the intended audience for this article, but it's pretty hard to understand when you don't know what CM, CNC, or BOM mean. Is it really so hard to use the <abbr> tag?

mcooley 12y ago
CM = Contract Manufacturer CNC = Computer Numerical Control (an automated mill) BOM = Bill of Materials (a parts list) It is jargon, but it's jargon that someone who would be concerned about "not showing ejector pin marks" would probably know.

ww520 12y ago

Build a Facebook lite for such and such...

qwerta 12y ago

Article does not mention capacitive touch screens. Apple basically build its own factories (and subsequently entire industry) to manufacture for iphone 1.

wmf 12y ago
But now it's a commodity.
sedachv 12y ago
> Apple basically build its own factories (and subsequently entire industry) to manufacture for iphone 1. Are there any articles or book sections about this? Seems very interesting.
joezydeco 12y ago
Capacitive screens are petty much custom for whatever the end applicaton is. Apple pretty much bought out the market for CNC laser ablation machines used in this line of work.

deleted 12y ago

[deleted]

lazylizard 12y ago

but apple is not the only large luxury goods manufacturer, right? how does louis vuitton do their thing? or leica? or rolex? if anything, aren't lv and rolex the orginals at mass producing/marketing luxury goods? separately, i imagine not just leica, but the entire optics industry has answered the question of precision/quality at scale before? and finally, there're more , right? like mercedes-benz, bmw, lexus, porsche, medical instruments, the aerospace industry... don't all of them have to solve 'quality at scale' problems? and at smaller scales..parker pens? zippo lighters? swiss army knives? and then..something like http://www.muji.us/store/ http://www.muji.us/store/ could be good enough as far as the perception of quality goes?

pduan 12y ago
Yea, none of those companies are startups. As for volume, they aren't shipping millions upon millions of their devices in a month either.
frankchn 12y ago
I think the idea is that most of those companies are large (compared to a 10 person startup) and have manufacturing expertise, which most start-ups may not have. Even companies like Parker Pens are part of large companies -- (e.g. Parker is part of Newell Rubbermaid with 19,000 employees and almost $6 billion in revenue).
- lazylizard 12y ago
  actually parker was founded in 1888 and was independent until 1993 when gillette bought it. i imagine they didn't need gillette's help to scale their manufacturing.. i think there're plenty of small firms, from furniture makers to knive makers to bicycle makers to audio equipment makers, that do quality at low volumes. i'd imagine a startup is exactly that - low volume. and they could probably figure out how to scale when they need to? its a good problem to have, right? i'm thinking of a car analogy.. its like.. i can't imagine that porsche, when they first launched the 911, were thinking about how to make 100000 of them a year.. or for that matter, a more recent example like koenigsegg or even tesla..they didn't exactly start with a 100000/year plant either..

eitally 12y ago

This is why -- for example -- Flextronics opened their Lab IX [1] in SV last year. In cases where hardware ideas are good ones, it makes a lot of sense for the guys with the manufacturing expertise to get in the loop early on. They can incubate, invest, and indulge in some of the wild stuff innovators want but can only be executed with $mm of equipment. [1] http://www.labix.io/ http://www.labix.io/

niels_olson 12y ago

Aren't turbine blades also grown from crystal before machining? Even Apple doesn't do that...

at-fates-hands 12y ago

When did Apple go from manufacturing ordinary hardware to making that leap where they had the financial resources to truly make something incredibly unique and beautiful? Was it one product one year, or did happen over a span of years where they had smaller increments of change? I'm curious to know how a company can get to a point and say, "Ok, we can do something really cool, on a massive scale and make it successful." Is a slower transition, or more of an abrupt change that takes place?

wtallis 12y ago
It was definitely a gradual thing. As early as the "Snow White" design language introduced in 1984, Apple was pushing the limits of conventional computer manufacturing techniques. And they didn't go from beige boxes to unibody aluminum slabs in one step.

DarkIye 12y ago

Seriously? Most founders' ideas hinge on their hardware product looking sleek? This is progress?