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Apple is America's semiconductor problem

semiconductor-digest.com

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Re: Apple is America's semiconductor problem

#41

Post by blackeyeblitzar »

WheatMillington wrote: post #20
brigadier132 wrote: post #11

The kind of monopoly apple has is interesting. In the US Apple has a complete monopoly on customers that spend money. If your app shows ads, apple customers are more valuable. If your app sells any kind of product apple users buy more. Market power is not determined by the number of users but by control of revenue.

Nothing you mentioned could be described as a monopoly. Monopoly has a definition, we can't just make it up as we go.

We can certainly alter definitions when they’re not useful. Anti competitive situations are more complicated these days and redefining this word that is commonly used to point at this type of platform may be overdue. We obviously see definitions change for political reasons all the time these days so I’m not sure why we would avoid it here.

Re: Apple is America's semiconductor problem

#42

Post by geoffpado »

Jtsummers wrote: post #12
jmclnx wrote: post #2

The article makes sense to me. Apple has such a large marketing clout, they are able to set the prices. So prices are so low, they can only be made using boarderline slave labor.

Apple is getting 50%+ profit off of their phones. Not sure their other device categories, but it's probably similar especially with their relentless streamlining of the internals. Moving iPad and all their computers to the same chip family (and manufacturing maybe 2 generations at a time with little overlap), for instance, gives them a substantial (potential) savings across all those product lines due to the combined…

Apple makes 35.3% gross margin on products, per their latest earnings call. Transcript here: https://sixcolors.com/post/2024/08/this-is-tim-q3-2024-analy...

While they make a gross margin of 46.3% overall, that’s mostly buoyed by the high margin on services, not on the products.

Re: Apple is America's semiconductor problem

#43

Post by mcphage »

> In 2017, when Apple announced it was moving away from using UK-based Imagination Technologies for graphics processors, the company lost two thirds of its value overnight.

I'm not sure what the author is suggesting here. They licensed technology from Imagine Technologies, so therefore they must continue licensing their technology?

Also: Imagine Technologies is a chip designer, not a chip fabricator. It's stuck in at the end of a paragraph about Apple's suppliers, but unless I'm mistaken—which I absolutely could be!—Imagine Technologies wasn't one. Also it's a UK company, so I'm not sure how Apple ending their contract with Imagine Technologies hurts the US's semiconductor problem.

Re: Apple is America's semiconductor problem

#44

Post by rice7th »

brigadier132 wrote: post #11

The kind of monopoly apple has is interesting. In the US Apple has a complete monopoly on customers that spend money. If your app shows ads, apple customers are more valuable. If your app sells any kind of product apple users buy more. Market power is not determined by the number of users but by control of revenue.

I guess apple works more as a "cultural monopoly", where if you don't own some apple device you're automatically ostracized by other apple customers. To them apple is more like a fashion clothing company like gucci than a technological one. Apple provides some sort of "privileged status" to their customers, just like purpur in ancient rome, so of course each apple stan considers themselves superior, and to keep their own privilege they need to buy more apple products.

Re: Apple is America's semiconductor problem

#45

Post by blackeyeblitzar »

peppertree wrote: post #21

Apple is a proxy of what people want. The Soviet has already tried top down supply chain management and it did not work.

When companies are so big that their value is measured in the trillions I think the line between the two is blurry. These companies are managed top down internally after all, so they’re just a smaller “Soviet” situation.

Re: Apple is America's semiconductor problem

#46

Post by causal »

duxup wrote: post #32

I have zero doubt Apple's influence is considerable and maybe monopolistic or something like that in a number of ways. But I find an article that doesn't even address any other companies a little hard to swallow. Are other companies simply not able to "reshore" chip fabs? I have no idea what some of the tidbits thrown in about the apple watch has anything to do with the topic. Let alone some of the heavy handed lines…

Yeah I'm a little confused by the premise. How would reshoring chip production be easier if Apple weren't out there buying chips? I get that they are buying up all of the TSMC chips in some segments. Doesn't that just create demand for an alternative? I can't cohere the themes of this article.

Re: Apple is America's semiconductor problem

#47

Post by brigadier132 »

xyzzy123 wrote: post #38
WheatMillington wrote: post #20

Earlier quoted context omitted.

Nothing you mentioned could be described as a monopoly. Monopoly has a definition, we can't just make it up as we go.

When a supplier has oursized market power that's monopoly. When a buyer has outsized market power it's called a monopsony. I guess that's the concept gp is reaching for.

I don't know the right way to describe it but Apple is the gatekeeper to their customers. I think it's accurate to say they sell access to their customers.

Re: Apple is America's semiconductor problem

#48

Post by Arn_Thor »

diggan wrote: post #18
wrsh07 wrote: post #5

If you're talking about America's semiconductor problem and not mentioning Intel even once, your view is horribly horribly slanted

Or, the focus is on another company? Just because you talk about Boeing doesn't mean you need to bring up every single competitor to Boeing, no?

Apple was an Intel customer. Talking about Apple’s role in the semiconductor sector MUST include Intel because one must explain how and why Apple decided to develop their own (first mobile, then computer) chips in the first place instead of sticking with Intel. Why is Intel not competitive? THAT question seems much more pertinent to America’s chip travails

Re: Apple is America's semiconductor problem

#49

Post by lifeisstillgood »

I’m not sure the argument holds water - it seems to be that Apple has huge market power (yes), and manufacturing in Western world basically moved to China (yes), India (yes). But it’s hard to say this is Apples fault.

If Apple had not been there, are we saying manufacturing would have stayed onshore - steel foundaries, car factories and chip manufacturers- I mean China and India account for over 3 billion people, who want roads, houses, cars and washing machines. Where else are the factories going to be - the weight of demand means even if US owned the factories they would still be in Guangdong.

So yeah, Apple probably misuses its market power, but it’s hard to imagine it did anything but tip the playing field further down the way it was already pointing.

So if we tax or punish Apple, do we really think it will all flip back?

My personal take is that energy and computing are the things that need to be in shored - no matter the cost differential. Industrialised counties, hopefully, will become energy independent (lots of solar, lots of insulation, lots fewer transport) and computing is going to be similar - focus on that verifiable secure designs

Re: Apple is America's semiconductor problem

#50

Post by szundi »

xyzzy123 wrote: post #38
WheatMillington wrote: post #20

Earlier quoted context omitted.

Nothing you mentioned could be described as a monopoly. Monopoly has a definition, we can't just make it up as we go.

When a supplier has oursized market power that's monopoly. When a buyer has outsized market power it's called a monopsony. I guess that's the concept gp is reaching for.

No no, it’s when there’s no one else to buy from
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