Hard News by Russell Brown

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Hard News: iPad Impressions

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  • giovanni tiso,

    but Jobs has touted sustainability as a priority to Apple shareholders, which seems notable.

    Jobs knows it's the business savvy thing to do. I don't know if the iPad bill of materials has been analysed yet, but Apple used to make an absolute killing on the iPhone - its profit margins were sky high compared to the costs of the materials. So let's say the iPad is greener. It also costs a small fortune. Does Apple sacrifice profit in the tradeoff? I doubt it. Buying an iPad means also buying a lifestyle and an ethics and an experience. It's like buying a Prius. Sure, the Prius is better for the environment than some non-hybrid cars. And the iPad is probably better for the environment than a $800 netbook. But they exist in the same marketplace, and the Apple product is greener and the conditions in which it is produced are less awful only by comparison to the cheaper products, and for the benefit of those who can buy and sell ethical consumerism.

    So no, I don't think it's a matter of inverted snobbery. Greenpeace focuses on Apple because Apple puts them on the front pages, sure, but also because Apple let itself be caught trying to cream even more profit than it already did by dealing with the kind of companies that it shouldn't have dealt with, considering how much it was selling its products for. I have zero sympathy for that.

    Wellington • Since Jun 2007 • 7473 posts Report Reply

  • Martin Lindberg,

    inverted snobbery

    Tell me about it! I've been suffering from if for years. I can't even bring myself to upgrade my 21-inch CRT TV. I keep meaning to, and I guess I could afford it, but everytime I find myself in the shop I think " C'mon, spending money on a TV is just so common. "

    But then I felt the same when I upgraded to my current TV 15 years ago from my 12-inch black and white TV.

    Luckily I don't suffer from this wrt my work equipment so it's Macs all around. Have you seen the new Quad-Core 27-inch iMacs?

    Stockholm • Since Jul 2009 • 802 posts Report Reply

  • Russell Brown,

    Jobs knows it's the business savvy thing to do. I don't know if the iPad bill of materials has been analysed yet, but Apple used to make an absolute killing on the iPhone - its profit margins were sky high compared to the costs of the materials.

    Yes, Apple makes a better margin on the iPhone because people will pay it, but that's true of all smartphones. Apple only makes a smartphone, the iPhone. It doesn't make the vast quantity of cheaper, low-margin phones that, say, Nokia does.

    So let's say the iPad is greener.

    Relatively speaking, it is. Overall, Apple is only about as green as Dell, but the iPad will help. Apple also started auditing its suppliers last year.

    The tech sector as a whole is surprisingly green in comparison to other industries. The worst, by far, according to a New Scientist study this year, is food and beverages.

    It also costs a small fortune. Does Apple sacrifice profit in the tradeoff? I doubt it.

    FWIW, the cost of goods in a $US499 iPad has been estimated at $290, with the touch-screen display the most expensive single part at $100. If you tot up the cost of development and sales and a retail margin, that's not really outrageous. They do better out of me with the 3G version, I must say.

    It also costs a small fortune.

    It depends how you look at it. If you buy an $800 netbook to go with your desktop PC, you're being thrifty. If you buy an $800 iPad, you're a tragic fashion victim who's killing the planet and bathing in the blood of exploited foreign workers. There's a pretty clear difference.

    Apple let itself be caught trying to cream even more profit than it already did by dealing with the kind of companies that it shouldn't have dealt with, considering how much it was selling its products for. I have zero sympathy for that.

    That's just wrong, Gio.

    The company Apple "shouldn't have dealt with" -- by which you presumably mean Foxconn -- also makes key parts or whole devices for Intel, Dell, Hewlett-Packard and Cisco; the PlayStation 2 and PlayStation 3 for Sony; the Wii for Nintendo; the Xbox 360 for Microsoft; phones for Motorola and Nokia; and the Amazon Kindle.

    We don't tend to have the same discussion about those companies and their products, even if we should.

    The media focus on Apple has had one good outcome: the company ordered Foxconn to pay workers making Apple products 20% more. But the manufacturing labour cost in all the above products remains very small.

    Auckland • Since Nov 2006 • 22843 posts Report Reply

  • giovanni tiso,

    We don't tend to have the same discussion about those companies and their products, even if we should.

    That's crazy talk. Of course we do - to extrapolate the relevant link from my blog post linked to above, the case of Microsoft.

    But that Apple should have got hammered when it had by far the largest margins than anybody else on its iPhones (and, before that, it's iPods and iPod Touches) is entirely appropriate. A company that sells and image, that sells you the Future, is the best case study to show that our future is actually the nightmare scenario of global capitalism in the present tense, for carriers of the wrong passports.

    And that 20% figure is grotesque. Again, it's not that iPads etc. are made ethically. They're just made 20% less unethically, in the same factories! They command a higher price, so it's ethics for those who can afford it. You can say that this premium makes Apple better than the other companies if you like - I find that kind of thinking incredibly naive.

    Are you bothered that Apple is singled out? Stop thinking of it as a separate entity. Microsoft, Nokia, Apple, etc. - think of them as the same company, selling different products to different demographics. The top end green products of this anonymous company carry a clean-conscience premium. And yes, they're made 20% less horrendously. So buy those if you can afford them, by all means. Just don't be precious about it.

    But the manufacturing labour cost in all the above products remains very small.

    Say, so long as it's so small, why not order Foxconn to pay its workers the average minimum wages of the countries in which those products are going to be sold? Just a thought.

    Wellington • Since Jun 2007 • 7473 posts Report Reply

  • Russell Brown,

    And that 20% figure is grotesque. Again, it's not that iPads etc. are made ethically. They're just made 20% less unethically, in the same factories!

    But ... but .. but you said Apple got "caught dealing with the kind of companies that it shouldn't have dealt with". I just wanted to point out that it uses the same major manufacturers as everyone else does. It wasn't "caught" doing anything.

    Are you bothered that Apple is singled out?

    Intrigued, really. We're not having this conversation about an ASUS netbook that costs the same as an iPad or an HTC phone that costs the same as an iPhone. But it was you that singled out Apple in the earlier post.

    Just don't be precious about it.

    Wow, that's a bit unfair. I was just disagreeing with you.

    Auckland • Since Nov 2006 • 22843 posts Report Reply

  • giovanni tiso,

    I just wanted to point out that it uses the same major manufacturers as everyone else does. It wasn't "caught" doing anything.

    It was caught using the same slave labour as everybody else whilst making much more money per unit sold than anybody else. Given that the official excuse for the use of slave labour is that otherwise we can't compete, I call that being caught. But it should be quite clear I'm not condoning the behaviour of the others just because they make slightly less profit per unit sold. Again, to me they're the same company.

    Wow, that's a bit unfair. I was just disagreeing with you.?

    The bit about Apple suffering from inverted snobbery was a bit precious, you'll give me that.

    Wellington • Since Jun 2007 • 7473 posts Report Reply

  • giovanni tiso,

    Again, to me they're the same company.

    (And it's a company I've bought a lot of products from, I should be clear about that.)

    Wellington • Since Jun 2007 • 7473 posts Report Reply

  • Russell Brown,

    It was caught using the same slave labour as everybody else whilst making much more money per unit sold than anybody else.

    Well, again, no. The gross margin on all smartphones is 40-50%, and although Apple's is possibly the highest, it's absolutely in the same range as the Nokia, etc, smartphones. It's just that Apple only makes the one kind of phone, and not millions of low-margin commodity phones.

    You're still trying to carve out a special case for Apple, and it's unconvincing.

    Shit ... I'd better actually go and earn some of that money stuff now.

    Auckland • Since Nov 2006 • 22843 posts Report Reply

  • giovanni tiso,

    iSupply did a study when the iPhone was released (I can't find it right now because it's buried amongst a million other iSupply releases on the same topic), and it found that the iPhone margins were astronomical. They also speculated that Apple could afford to slash prices in a matter of months, which Apple did - and they early adopters got pissed, as I recall.

    Wellington • Since Jun 2007 • 7473 posts Report Reply

  • Russell Brown,

    They also speculated that Apple could afford to slash prices in a matter of months, which Apple did - and they early adopters got pissed, as I recall.

    And got a rebate. Apple certainly over-reached on that initial pricing, and they haven't made that mistake with the iPad.

    Auckland • Since Nov 2006 • 22843 posts Report Reply

  • giovanni tiso,

    In other words, they got caught :-)

    iSupply table for the iPad. Those margins, not too shabby eh?

    Wellington • Since Jun 2007 • 7473 posts Report Reply

  • Russell Brown,

    iSupply table for the iPad. Those margins, not too shabby eh?

    Yes, but it's worth bearing mind that's the cost of parts and putting them together, not software, royalties, freight, marketing, retail margins and the wages and salaries of the people who developed it all.

    Auckland • Since Nov 2006 • 22843 posts Report Reply

  • Martin Lindberg,

    What's the going price for innovation, design and engineering?

    Stockholm • Since Jul 2009 • 802 posts Report Reply

  • recordari,

    iSupply table for the iPad. Those margins, not too shabby eh?

    Surely the price reflects the market demand? If it didn't they wouldn't be selling so many of the damn things. Better marketing means better returns. What's the problem with that?

    If Apple is forced to limit the margins on it's products, the world really might be ending.

    It's day 5, and I still haven't bought one, but my resistance is wavering, and more so for all this Apple Bashing. Maybe 'we' really are Satan's minions. Cause I would clearly sell my soul for an iPad right about now...

    AUCKLAND • Since Dec 2009 • 2607 posts Report Reply

  • Russell Brown,

    What's the going price for innovation, design and engineering?

    Whatever that new iMac costs :-)

    But yeah, I don't mind admitting to being a fanboy. I've been using Apple products since 1986, and paying a premium through the years when Apple was making massive losses (and making some seriously shitty computers). It worked for me in a way Windows didn't.

    The brilliant industrial design of key Apple products certainly attracts me now. They actually developed new plastics for the first iMacs, because existing materials wouldn't do the job. When everyone else was still shoving components in beige boxes, that was quite a step.

    I could go on about how Jobs changed Apple's supply chain process so it was carrying less unsold inventory than almost any other computer company -- a big factor in Apple's turnaround -- but I'd just bore you all.

    Auckland • Since Nov 2006 • 22843 posts Report Reply

  • Martin Lindberg,

    Whatever that new iMac costs :-)

    Exactly, and I'm prepared to pay for that innovation, design and engineering. I would not really describe myself as a fanboi, certainly not since 1986. I would never have bothered with the pre-OS X Macs. Now, I use their iMac and Macbook Pro. Oh, and the iPhone and a few iPods. But have no real use for or interest in the iPad. So, umm, obviously not a fanboi.

    Stockholm • Since Jul 2009 • 802 posts Report Reply

  • BenWilson,

    What's the going price for innovation, design and engineering?

    Indeed. I probably won't get an iPad for a long time and don't own any other Apple products but I don't consider that them choosing their own margins to be especially exploitative. It's what businesses do, they choose a margin to make a profit to run their business. If that's a nice fat one, all power to them. I personally won't pay it, but I can see why people do.

    Auckland • Since Nov 2006 • 10657 posts Report Reply

  • Russell Brown,

    I feel bound now to point out that I hadn't personally bought a new Apple product for two years before last week's purchase.

    Noel Leeming's 30 months interest-free does make an iMac upgrade more attractive -- especially given that my current iMac is the tool that facilitates all my income -- but I'm in no great hurry.

    Auckland • Since Nov 2006 • 22843 posts Report Reply

  • recordari,

    Our current iMac is a G5 PowerPC. 2004? The Macbook for work is newer, but I'm certainly more towards the 5 year replacement than 2.

    I'm increasingly convinced that buying an iPad would actually be saving money as it would further delay the upgrade of the iMac ;-)

    And as fanboys go, 1983 Apple IIe? And we had the first Macintosh at home in 1984. Cock-a-doodle-doo!!

    but I'd just bore you all.

    No, not all. But I might have heard it before. Just don't mention the Australian connection or I might start contradicting myself on the whole pricing thing.

    AUCKLAND • Since Dec 2009 • 2607 posts Report Reply

  • Steve Barnes,

    Going back to the bit about glass in CRT screens. They use lead not because of its radiation shielding properties but because lead gives you a clear glass with no tint, if you used gold it would give you red glass which would really fuck up the colours.
    A question about the iPad, does it have a floppy drive? (not that I ever need a floppy drive, it's just that I may need another reason for not being suckered into buying the hype ;-))
    I like being able to build and fix my own stuff so, to me, the Apple offerings are a step in the wrong direction. What happens when it all goes wrong? I have just had to replace a car for the first time in my life because I couldn't fix it, had it been an old Holden or Ford it would be back on the road but this new stuff is just so specialised as to make it beyond the skills of the most adventurous DIY fixerupper.
    (Wanders further off topic and falls off page)

    Peria • Since Dec 2006 • 5521 posts Report Reply

  • Martin Lindberg,

    A question about the iPad, does it have a floppy drive?

    No, but you can connect one to the parallel port ;-)

    Stockholm • Since Jul 2009 • 802 posts Report Reply

  • Kumara Republic,

    When everyone else was still shoving components in beige boxes, that was quite a step.

    And from the machines we've been building and selling at work, black & silver are the new beige.

    The southernmost capital … • Since Nov 2006 • 5439 posts Report Reply

  • Russell Brown,

    Auckland • Since Nov 2006 • 22843 posts Report Reply

  • 3410,

    I feel bound now to point out that I hadn't personally bought a new Apple product for two years before last week's purchase.

    You sound like an alchoholic. ;)

    Auckland • Since Jan 2007 • 2618 posts Report Reply

  • recordari,

    Using an iPad to replace the tape cassette drive for an Apple iie.

    Damn your eyes! Now I want an old Apple IIe and an iPad.

    AUCKLAND • Since Dec 2009 • 2607 posts Report Reply

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