The new Apple’s advantage: Supply Chain Optimization
Peter Bright wrote a good piece earlier this week documenting his attempt to buy a MacBook Air-like Windows laptop (he doesn’t want an Air running Windows using Boot Camp because he doesn’t like Apple’s U.K. keyboard) and finds the experience confusing (too many models to choose from) and expensive (comparatively-equipped machines from Dell, HP, and Lenovo cost considerably more than an equivalent MacBook Air).
E.g., here’s Bright on shopping from Dell:
It’s even worse if I just browse without searching. The options I get are just… meaningless. Yes, I want “Everyday Computing,” so I want an Inspiron. But hang on, I also want “Design & Performance,” so I want an XPS. Wait a second, I want “Thin & Powerful,” too. So maybe I want a Z Series? But the only line that apparently matches my broad search criteria — lightweight, 11-14” — I wouldn’t even consider because I don’t want a “gaming” laptop, and so I’m never going to click Alienware!
From HP:
The same odd labels cover everything — I know I don’t want “Mini/Netbook,” but I want both “Everyday Computing” (that term again) and “High performance” (because I don’t want it to be slow, do I?). And who knows what “Envy” means? When I tick my screen size and weight boxes, I get back a crop of lousy netbooks that are almost the complete opposite of what I want.
And Lenovo:
It starts off with the same stupid classifications that must make sense to some guy in marketing — “Powered for productivity” and “Optimized for entertainment” and “No-nonsense features built for versatility”.
And don’t forget the Apple-like prices, which is where Bright’s laptop hunt faltered. But so why the dearth of Apple-caliber products from companies other than Apple? Bright’s analysis regarding why the top PC makers seemingly — if not outright admittedly — can’t compete with the MacBook Air strikes me as pretty good:
The problem is that the PC industry, particularly the large OEMs, just aren’t set up to produce this kind of machine. The PC industry is built around an idea of almost infinite variation: different Wi-Fi adaptors, different Ethernet chipsets, different GPUs, different USB3 controllers. This variety is then reflected in the systems available from manufacturers — and more importantly, it’s reflected in the way the systems are actually built.
Design is largely about making choices.
The PC hardware market has historically focused on three factors: low prices, tech specs, and configurability. Configurability is another way of saying that you, the buyer, get a bigger say in the design of your computer. (Bright points out, for example, that Lenovo gives you the option of choosing which Wi-Fi adaptor goes into your laptop.) Apple offers far fewer configurations. Thus MacBooks are, to most minds, subjectively better-designed — but objectively, they’remore designed. Apple makes more of the choices than do PC makers.
This isn’t new. And traditionally, the benefit from Apple’s lesser degree of configurability has been the “it just works” factor — better integration of software and hardware. That with support for fewer components, like, say video cards, the Mac OS needs fewer drivers, and the drivers it does have are less likely to result in unusual conflicts.
But now that Apple’s products are more popular, we’re beginning to see another benefit to Apple’s lesser degree of configurability: greater scalability. Apple needs larger quantities of fewer different components to manufacture the same number of computers as other companies. It’s not just the economies of scale that all companies get when they sell 3 or 4 million laptops in a quarter — it’s greater, because Apple’s 3 or 4 million laptops sold share a larger number of the exact same components.
This advantage is more pronounced with iOS devices. In four years, Apple has gone from not being in the phone business to reaping a majority of the handset industry’s worldwide profits. Yet they make only two phones — the iPhone 4 and 3GS.
Likewise with the iPad. Your only choices:
- White or black
- GSM, CDMA, Wi-Fi-only
- 16/32/64 GB of storage
The iPad is the best-selling portable computer in the world and those are the only configurable options. One CPU, one display, one amount of RAM.
The new MacBook Airs are iPad-like. Apple is selling more MacBooks than ever before, but their range of models is shrinking, not expanding. As SSD prices fall, I expect Apple to drop the “Air” and “Pro” distinctions and simply offer four Air-like MacBooks: 11, 13, 15, and 17 inches.
So let’s be lazy for a second here, and attribute all of Apple’s success over the past 15 years to two men: Steve Jobs and Tim Cook. We’ll give Jobs the credit for the adjectives beautiful, elegant, innovative, and fun. We’ll give Cook the credit for the adjectives affordable, reliable, available, andprofitable. Jobs designs them, Cook makes them and sells them.
It’s the Jobs side of the equation that Apple’s rivals — phone, tablet, laptop, whatever — are able to copy. Thus the patents and the lawsuits. Design is copyable. But the Cook side of things — Apple’s economy of scale advantage — cannot be copied by any company with a complex product lineup. How could Dell, for example, possibly copy Apple’s operations when they currently classify “Design & Performance” and “Thin & Powerful” as separate laptop categories?
This realization sort of snuck up on me. I’ve always been interested in Apple’s products because of their superior design; the business side of the company was never of as much interest. But at this point, it seems clear to me that however superior Apple’s design is, it’s their business and operations strength — the Cook side of the equation — that is furthest ahead of their competition, and the more sustainable advantage. It cannot be copied without going through the same sort of decade-long process that Apple went through.
Source: daringfireball.net
