Apple: How to Spend $10 Billion And Make a Few Friends

Inside Apple, the executives know they're in a manufacturing war with Samsung. Exotic materials, including sapphire, plus lasers and expensive robotic milling machines all contribute to modern electronic devices like our smartphones that make the difference between first-class consumer goods and second rate junk. That war has serious consequences, and so that's where Apple is spending the big bucks.


There was a time when observers thought that Apple should buy this company or that in order to improve its competitive posture. Back in the 20th century, the idea was to buy up big competitors and dominate the market. But that creates all kinds of problems, including culture clashes. This century, the better idea is to buy technology that helps improve a company's products.

Of course, Apple buys companies, but generally, they're small and culture clash isn't a problem. Apple is after technology, patents and first-class engineers.

It's instructive and fascinating to see how Apple, behind the scenes, really does understand the stakes in global manufacturing and is making strides to seize control of critical parts of its supply chain.

Philip Elmer-Dewitt explains and introduces us to an extremely important Bloomberg article that goes into considerable detail on how Apple is planning to spend $10.5 billion on robots and lasers that build Apple products. For a glimpse of that, one need only review the equipment Apple has put in place to build the new Mac Pro. It's an amazing video.

Robot polishing a Mac Pro in production. Image credit: Apple

The Bloomberg article and the Apple Mac Pro video combine to demonstrate ways in which Apple has to innovate, just to build the products they're already shipping. It's sobering indeed. To put it into perspective, the cost of the new Gerald R. Ford nuclear aircraft carrier, exclusive of R&D, is only $9 billion, taking four years to build and three more years to commission.

U.S.S. Gerald R. Ford in dry dock, ready to be floated. Image credit: Wikipedia

And that is how Apple is smartly spending 10 billion bucks.


Tech News Debris for the Week of November 11

Various bloggers with different levels of expertise often make critical comments about Apple software. But when a former Apple executive unloads on Apple, the discussion rises to a whole new level. This time, Jean-Louis Gassée has taken Apple to task for its launch of the new iWork. "New iWork: Another Missed Opportunity To Set Expectations."

Mr. Gassée isn't buying the argument that OS X and iOS code bases needed to be on common ground before proceeding.

The logic of a fresh, clean start sounds compelling, but history isn’t always on the side of rewriting-from-scratch angels. A well-known, unfortunate example is what happened when Lotus tried a cross-platform rewrite of its historic Lotus 1-2-3 productivity suite.

This is an articulate and critical analysis of Apple's current software development strategy.

There seems to be an everlasting discussion about the relative success of Android versus iOS. It's like the fable of the blind men inspecting an elephant. Each man tells a different tale of how he perceives the elephant depending on where he touches it. However, some sanity can be derived from following people whom you trust, people who do their homework and make sense of the graphs presented. One such person in my view is Dan Dilger. Try this one for size: "More iPhone buyers switching from Android this year than in 2012."

Two articles this week speak to the fate of Microsoft. It's very hard for Microsoft to properly size up its condition when the money still rolls in. Perhaps only Steve Jobs could take a company that's making money, evaluate the real crisis, and turn a company on a dime.

The first essay is by Peter Burrows and Dina Bass is "Microsoft CEO Candidate Elop Said to Mull Windows Shift." The second comes from CNET's Charles Cooper. "Does fixing Microsoft mean ending Microsoft as we know it?" My take on the situation is that people who are in a position to know, expert followers of Microsoft, realize that Microsoft has backed itself into a big corner. The details of the escape remain murky.

The similarity of names, MacBook Air and iPad Air invite comparisons. And that's exactly what this article does. It's a playful comparison of the two products in terms of living with one or the other. For some fun: "Air vs. Air: Can the iPad Air be a suitable stand-in for a MacBook Air?"

If you thought AES 256-bit encryption was good enough to protect your encrypted disk images, think again. Google has had to up the ante to 2048-bit encryption to keep its customer data safe from the prying eyes of the NSA. "Battle brews as tech companies attempt to fend off NSA hacking." According to the National Institute of Standards and Technology, 2048-bit encryption should suffice until about 2030.

Finally, Jonny Evans has provided some really good suggestions on how to improve Siri in iOS 7. The article reminds us that Apple can only take us so far. Sometimes learning a few tricks can save the day.