How does Apple do it? How do they keep secret products that require huge billion dollar deals, years of planning and cutting-edge technology up until the moment Apple wants to announce it? How does Cupertino consistently leap frog the competition to market with new products at such low prices, then keep that lead for years? And how does Apple do all of this while maintaining record profits and 40% gross margins?
BusinessWeek has a fantastic look at the intricacies of Apple’s supply chain, which is the best on Earth. The secret? Hoarding lasers, they cheekily suggest. But that’s not actually all that far off.
In BusinessWeek’s piece, they talk about how Jony Ive designed the green light that pops up through the aluminum when your iMac or MacBook’s iSight is on. No one had ever even thought to try to shine a light through metal in a laptop before, but by spending millions, Apple was able to get a stranglehold on the special lasers needed to drill tiny holes almost invisible to the human eye into every Mac, specifically for that little green light. Any competitors who would even want to ape that little detail would need to find the right kind of laser to do it, and Apple’s got exclusivity agreements with all of their manufacturers.
Apple’s supply chain canniness hardly ends there. Apple’s strategy under the leadership of Tim Cook is to buy up all available stock of what Cupertino wants — whether a part or even a service like air freight shipping — and then make up for the expense in the long run. As for how they keep products secret right up until launch, Apple’s special relationship with its suppliers means it can do things like, say, ship the iPad 2 overseas in tomato boxes so no one knows a new Apple product is inside.
The full piece, while short, is just too full of great little details to ignore. Reading it really just does put in perspective how completely screwed Apple’s competitors are: Apple’s got such a tight control of its supply chain, it might as well be releasing products from two or three years in the future..