Apple Production Strategy

Dell has long been credited as the best way to order a computer. It’s highly customizable, highly flexible. Then, along comes Apple and does things the exact opposite way. They claim that it’s not as valuable to be flexible, that it’s more valuable to know exactly what users really want.

With that in mind, could it be that Apple decides to produce by looking at how much it costs them to produce the marginal device and they then make their configuration decisions based on that? For example, most of their mobile devices come with 16 GB storage capacity. They’ll make those in the greatest volume. As they get closer to the limit of their capacity for production, however, they will start building 32 GB devices. Because nearing the limit of yield the marginal unit costs more to build, might they build a more expensive device? As they get to the very end of their production capacity, they go ahead and produce the last few as 64 GB devices, which are, of course, priced even higher. The idea would be that the devices that are least expensive for them to produce (at the beginning of a production run) will be made 16 GB. As they become more expensive to produce (nearing the margin of production) they will make a slightly more expensive device, the 32 GB model. Same with the 64’s, as they approach the absolute limit of production, produce the highest priced devices.

If this is the way they do it (and it’s at least plausible, isn’t it?), why don’t more device-makers produce this way?


About wrencis

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