‘Ultrabook’ manufacturers look to plastic as Apple commandeers unibody aluminum supplies

“Intel’s new ‘Ultrabook’ initiative designed to help PC manufacturers churn out MacBook Air clones has hit a snag,” Chris Rawson reports for TUAW.

“According to Digitimes, Apple has gobbled up almost all of the available capacity for producing unibody aluminum parts, which it uses to build the chassis for its notebooks,” Rawson reports. “Production capacity for these parts is so constrained that PC manufacturers are reportedly only able to produce one chassis every three hours.”

Rawson reports, “Stories like this certainly show how the tables have turned in the past ten years. Today, PC vendors who try to compete with Apple on both features and price almost inevitably find they have to sacrifice one or the other. Ultrabooks are no exception; Apple’s supply-side savvy has allowed it to lock up a significant portion of manufacturing resources, leaving less and less for the rest of the industry.”

Read more in the full article here.

MacDailyNews Take: Oh, but wait, wasn’t Apple instead supposed to blow cash pile and the leverage it commands on unnecessary stock buybacks and dividends?

[Thanks to MacDailyNews Reader “Lynn Weiler” for the heads up.]

25 Comments

  1. Thank god apple has it locked up.

    Alluminum is very energy intensive to make. I dont want a sh*t load of throwaway dulls made with that metal. At least apple makes a quality product with it.

    1. Aluminum is also very recyclable. Apple captures & recycles aluminum scraps during the unibody CAD CAM erosion process from aluminum slab blank. Post consumer use allows for easy recycling of aluminum @ glass MB Air / MB Pro / iMacs / iPads etc so life cycle cost & carbon footprint is much lower than you think.

    2. Actually, that is not quite so…
      While quite a bit of energy is required to refine aluminum from ore, (though that is true of a large number of modern metals) it is not particularly energy intensive to manufacture.
      Recycling scrap aluminum saves roughly 95% of the energy expended vs refining from ore. (bauxite), So you can see most of the energy is in the refining, not the manufacturing. (and Apple is very conscientious and even recycles the scraps and chaff (aluminum chips from milling) from the manufacturing process.

  2. To be completely fair, Apple makes so much cash, it could pre-buy components and lock up suppliers as it has, AND do a stock buyback or dividend, AND still have more cash than just about anyone.

    1. Because, the cash used for pre-buying components and locking up suppliers has already been deducted from Apple’s cash pile, so the $81B you see there today, is net of that cash spent on capital expenditures and server farms and retail stores, etc. As you can see Apple is not lacking cash. Also, it’s quite cheap to borrow for a company of Apple’s pristine balance sheet quality. Wasn’t it Microsoft that borrowed recently or Google, even though they had plenty of cash, but that borrowing was so cheap they borrowed to fund something?

      1. The cheapness of borrowing has to compare against the return of the cash. For instance, if Apple’s earning %4 on their cash and borrowing costs %1, then it would be better to borrow $10B than to spend $10B. But there are other factors, like most of Apple’s cash is outside the USA.

        Steve Jobs said the cash horde is for strategic purposes. I think spending $4B to lock up suppliers for key components is pretty strategic, and it doesn’t’ take many of those deals before it ads up to “real money”, even if you have $80B.

        Personally, I hope Apple is planning to start a gobal cell network.

        1. Yes, I think Apple should build a global cell network – start in the USA, and go from there.
          If Apple can apply its thinking to all the fudged-up, f**ked up technologies in the world, things might change.

          I would also like to see a car designed by Apple/Jony Ive…

          1. Yeah, a sports car sporting a unibody aluminum body.
            OTOH I believe Apple now knows to shun the kind of unproductive “diversification” of models that existed in the Amelio era.

  3. “…reportedly only able to produce one chassis every three hours…” Are you freaking kidding me? ONE multi-axis milling machine ought to be able to produce MANY chassis in three hours. Using those numbers, it would take over seven years for Apple’s suppliers to produce 21M chassis using 1,000 CNC mills. Somehow, Apple will sell more iPad 2’s than that in one quarter. As usual with analysts and numbers, something does not add up.

    The real reasons that PC vendors will not manufacture unibody ultrabooks (or any other laptops)? Cost and patents. Apple has the economy of scale to pull it off and does not dabble in the low margin side of retailing. My Macbook Pro feels as rigid as a steel beam compared to plastic Dells and the like. Apple quality from start to finish – that’s what sold me.

    1. > Production capacity for these parts is so constrained that PC manufacturers are reportedly only able to produce one chassis every three hours.

      It’s just a lame excuse, because one sale every three hours is about all the competition can muster. “Ultra” indeed…

    2. You are correct Mel. Apple has patented the way they produce their aluminum chassis’. Additionally Apple purchased the milling machines required to produce them. That requires a level of cash and gross margin Apple competitors don’t have.

    1. Plastic is Superior!

      Windows Laptops come in colors!

      I need to find that link… there was some list made by MS or something, showing the reasons a windows laptop is “better” than a macbook.. one of the reasons was color choice. lol.

  4. Indeed, Apple does hold patents that relate to component layering/grouping/anchoring that make the Unibody design at all possible, along with several case design patents. You could sum it all up with ‘Where did all the screws and weight go?’
    Without all these features, I could well imagine a competitors box taking at least 10x longer to assemble.
    I remember when the Unibody design was being touted by Apple as revolutionary – I think we now know why and also why Jonny I’ve is probably the most valued designer in the world.

    1. “Indeed, Apple does hold patents that relate to component layering/grouping/anchoring that make the Unibody design at all possible, along with several case design patents.”

      When did Apple’s patents ever stop their competitors from copying them? Or from crapping on like indignant fuckheads on the rare occasions Apple actually gets around to suing them?

  5. Only Apple had the design chops to look to aluminum in the first place. Nobody else was exploring material science for any design parameter whatsoever. (Instead, they were all wondering what color their plastics should be, and how many stickers could fit on the front.) They damn well _should_ be sucking Apple’s exhaust fumes and trying to make a purse from it, to really mangle some metaphors.

    1. Exactly, what the author should be saying is how tables have turned, if you are trying to copy Apple, good luck. Because as Apple innovates on design and materials, copiers are going to have a difficult time finding capacity in the areas where Apple is innovating because Apple’s now significant global volume virtually absorbs worldwide capacity overnight in these nascent niches.

  6. To anyone who claims that Apple is being monopolistic by locking up supply, the truth is Apple’s competitors don’t know they need a particular item till Apple comes out with their hit product.

    There’s still plenty of black plastic for others to make their laptops from.

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