The Tech Monopolies Go Vertical
As an example of this I do wonder if the PC industry realises the bind they’re now in with the Apple and the M1.We don’t know the unit cost of those parts, but we know from past statements they are a very small proportion of what Intel is charging OEMs for their processors.Given that the perception has always been that MacBooks are the best built laptops available, but priced at a substantial premium, it’s been fine for a Dell or HP to coast by on lower prices and thinner margins (as long as Apple wanted 30% or so in profit on each unit sold it was easy to compete on price and still make a living).With the M1, Apple now has the option of competing directly on price while preserving their margin, with a substantially faster machine, that still has the other premium elements (e.g. the aluminium body, the massive trackpad).I don’t know how any one of their competitors can compete with a similarly-priced device that is faster, better built, and commands much higher residual value down the road.Maybe I’m being naive but I’d be very worried right now if I were Dell/Lenovo/HP, especially given that Intel doesn’t have a working 5nm process.It’s even worse for companies like Hynix, given the performance gains from the on-package memory architecture in the M1. AMD are going to have to go down that route now to compete, and that doesn’t leave much room for direct-to-consumer DRAM vendors (although given the questionable histories in that market it may not be the worst thing for the consumer).