Apple’s iPad advantage: The supply chain

“How is it that Apple is able to beat every single tablet vendor on price?” Jason Perlow asks for ZDNet. “Their secret sauce: The supply chain.”

“We really don’t know what is going to be in the next iPad, although we can make some educated guesses. However, I think we can be fairly certain that it will be announced soon, and that it will have a feature set that will allow it to be competitive with any Android 3 tablet due for near-term release, but most importantly, the base model will not exceed $500.00 in price,” Perlow asks. “This is something that no matter how hard they try, none of the other Tier 1 consumer electronics manufacturers are able to do. It’s probably flat-out impossible.”

Perlow reports, “Apple has set the bar at $500.00 for an entry-level 10″ Wi-Fi tablet device. So far, there are no products scheduled for release by a Tier 1 manufacturer that even come close to this price point. How is Apple able to do this where nobody else can? It has to do with buying up the entire supply chain and being able to leverage quantity 10 Million+ manufacturing orders in advance with its partners in China like FoxConn and with semiconductor component suppliers such as LG, Samsung and Philips.”

Full article here.

[Thanks to MacDailyNews Reader “Edward W.” for the heads up.]


  1. But those others will brag they have HDMI , USB and lots of other slots and connectors. Specs will be their cry. Android outsells iOS!! Like Ford now outsells Camry.

  2. Oh, come on!

    There has to be a few Fandroids that want to spend $800++ on a Moto Xoom!

    BTW, how do you pronounce “Xoom”?

    Since it is made in China, I assume you would use Pinyin. In that case, “x” is the “sh”, and it would be pronounced “Shoom”. Which rhymes with “shroom”, which is often short for “mushroom”, which might be the “magic” mushrooms.

    Magic mushrooms must be what the Fandroids are ingesting if they think that the $800++ Xoom is where it’s at.

  3. “Apple’s iPad advantage: The supply chain”.. Are you kidding me?
    The iPad advantage is the supply chain, the iOS, the hardware, the design, the business behind the iPad, the ecosystem, the applications, the 30 pin connector…………. Not just the supply chain.

  4. It will be a big blow to the belief that Windows became so popular because it was so “open”.  If no one can build a tablet for less with a even more “open” OS then what.  The supply chain is a good part, I have always said that there was more than one reason for Apples problems in the 90’s.  Dell had the supply chain.  They cut out the waste buy selling direct and only building what was ordered, at first anyway.  Now Apple has the upper hand.   

  5. Think about the form factor of the iPad as well. ON/OFF switch, Volume ON/OFF switch, Home Button, (Sim Card), USB connector. They make it so there are VERY few pieces of UI. Any type of upgrade has little or no impact on these UIs, which means little or no change to an existing manufacturing plant line. Imagine if they added more buttons, and ports, slide out keypad… it would be a major impact on the manufacturing line, not to mention massive changes to the iOS to handle what all those new buttons do upgrade after upgrade.

  6. The supply chain is only part if the answer to the question: What is Apple advantage?

    Another very important one, closely related to quantity produced, is the ‘experience curve’, sometimes called the ‘learning curve’. Apple has gain valuable experience in R&D, design, manufacturing, and marketing this stuff. Therefore, they are more efficient and make way more profit selling iDevices (and notebooks).

    Have a look at APPL income/employee vs., say MSFT, RIM, etc.

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  7. MDN iPhone app

    I get a notification of a new story.  When I go to it the old story is still there and I have to reload the site.

    Why does it not auto reload and my stock price does not change. Will this ever get fixed.  Or is it me?

  8. What cheapskate Android fanboi is going to spend $800 on a Motorola Xoom. All those open platform Android fanbois talk about is how all these Android tablet vendors are going to provide them with high-quality tablets for $300 that have all the power and beauty of an iPad.

    What are these Android tablet vendors going to do? Sell high-quality tablets for $300 and lose $300 in the process? What is the matter with these deluded Android fanbois. Do they think that selling decent tablets to consumers is child’s play or what? I want to see Android tablets fail hugely, not because I don’t think they have a place for some consumers, but because of those deluded arrogant fanbois that can’t see any further than some dead piece of hardware with a few fancy specs. Consumers are not into that feature-heavy fanboi nonsense. Most consumers just want a well-built, reliable product that’s easy to use and if necessary, they can get decent customer service to help them with problems. Fifty different Android tablets will be a nightmare for consumers.

  9. Some of this is BS, netbooks have been around for a while now and you can get them well under 500 bucks. They have screens, memory, processors and hey they can through Android on for free. They dont need the keyboard and all they need to do is flip the monitor onto the back. Now you have a sub 500 tablet, like it or not.

  10. It’s the Apple iPad price advantage that the author was talking about.

    If Apple spent peanuts on iOS then iOS could be part of the price advantage, but Samsung pays peanuts for Android, so, no, iOS is not part of the price advantage.

    Afraid it is all down to the supply chain when it comes to the price advantage.

  11. The answer to this question:

    Tim Cook, and Company

    Steve Jobs is the visionary leader where Cook et al are the enablers who has worked hard for a long time to set up the supply chains, manufacturer relationships, and design culture to enable actually designing and building magical devices at product/price points that make them accessible to consumers.

  12. I purchased the device as soon as it was available in the UK. Put simply its he best and most useful device I own .Build quality is superb , its a joy to use. I will purchase another when Apple add retinal screen like the iPhone 4 . Its not the supply chain thats holding it back in the UK its the poor data network speed. On WiFi systems the device excels Hope Apple brings out their own television this is a section of the market that needs a kick up the butt.

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