For all the talk about Apple being a company that goes its own way, a technology design firm that does not follow the beaten path, but charts its own course, Apple is highly dependent upon technology and manufacturing from others.
It’s been widely reported that Apple co-founder Steve Jobs once had a grandiose vision of a Mac factory which consumed sand at one end of an automated manufacturing line which turned it into silicon and pushed out new computers at the other end in a perfect demonstration of technology independence. There is no such thing. Apple is highly dependent upon other manufacturers for everything.
To Be, Or Not To Be
That Apple charts a course in a somewhat difference direction than competitors, whatever the product segment, is not under dispute. Sometimes Apple leads by miles. Sometimes Apple follows closely. A good example of leading is Apple’s CPU designs for iPhone and iPad which are more advanced, powerful, and power-sipping than competition from Samsung or Qualcomm.
A good example of following is Apple’s screen technology, still based on leftovers from the LCD era, and somewhat behind the OLED curve. In between is Apple’s camera technology, once so advanced that it destroyed the megapixel comparison method, but if you’ve seen photos from Samsung’s new Galaxy line, you’ll see leap frogging in action.
On the surface it appears as if Apple seldom pays attention to either competitors or customers and simply goes about its business designing what it thinks the world will want, and all too often the company is absolutely correct. In many ways Apple isn’t even dependent upon customers. We love the company’s designs and we’re willing to buy sight unseen.
It’s likely that executives from most companies would prefer more independence from the supply chain and the laws of physics, and Apple won’t be any different. The company designs its own products but does not manufacture all of its own products, instead farming out both component and final assembly to other companies.
With many of the company’s products Apple buys what’s already on the component shelf and available to competitors. That includes screens, CPUs (Intel), SSD and hard disk drives, and batteries. Yet, Apple designs the hardware to tight specifications and works with manufacturers to drive down production costs so the company enjoys massive gross profit margins not found elsewhere in the industry.
Is Apple an independent company? Or, a very dependent company that relies on other companies to produce components and finished products?
While Windows PC, smartphone, and tablet makers usually follow the path of least resistance and manufacture the least expensive products wherever possible, Apple prefers the independence of marrying both hardware and software into a cohesive package that easily differentiates Mac, iPhone, iPad, and Watch from every other product on the market. Apple controls the hardware design and manufacturing process, but doesn’t own all the manufacturing for every component. Yet, Apple completely owns the software design process, another key point of product differentiation that helps the company attain a measure of independence while remaining somewhat dependent upon others– even competitors like Samsung– for manufacturing.
We might like to think of Apple as this independent maverick which goes its own way, and it’s possible that even company executives think the same, but the reality is more complicated. Apple is both independent– to a degree beyond competitors– and dependent, to a degree similar to competitors who rely on third party components and manufacturing to compete.