Apple orders PC builder to 'choose sides' in laptop battle? Apple reportedly put pressure on a Taiwanese manufacturer of its popular MacBook Air, asking them to choose between building that Cupertinian laptop or the ASUS Zenbook. According to a story in the Chinese-language Commercial Times (Google Translate), Apple has told the manufacturer, Pegatron, to "choose sides" – 選邊 – between …
If this does not highlight why I dislike Apple, nothing will.
Every hardware manufacturer needs to stop making ALL Apple product until Apple apologizes publicly and moves into courteous relationships with each.
No one is obligated to make Apple hardware and unless these abuses are stopped now it will only get worse.
Now I'm not really an Apple fan, more into the Microsoft offerings in general, but I hold no grudges against any company - and I really don't see what's wrong with this?!
If you're a defence contractor, doing work for a particular Government, that work is 'ring-fenced' (can't think of a better term). You aren't allowed to use the knowledge or ideas to assist a foreign Government to create similar technology.
That's just one example, but their are many instances of suppliers having to abide by similar arrangements. It's obvious that Apple had to do a lot of research with manufacturers to perfect the unibody construction. Pegatron could easily slip Asus a few hints to help them avoid similar problems that Apple may have encountered. So it's easy to see why Apple might be a little annoyed!
If Pegatron wants to profit off Apple products, then they must obey the terms Apple sets out. I'm not arguing that it is a wise business decision, there are plenty of pitfalls, but when Apple holds all the cards and supplies a massive chuck of your profits, it's a decision to consider...
if they signed a contract that said they couldn't manufacture for anyone else, then started to do exactly that, and Apple said to stop it, then it would be a non story,.
But the fact is, that Apple have, it would seem, only kicked up a fuss as they make a genuine contender to one of their own products.
If apple want to protect their manufacturing processes, maybe they should consider owning the manufacuring process, instead of buying it in.
Lately, Apple seem less concerned with actually innovating, than stopping others competing. That's where the line is crossed.
@Terry Barnes
Twaddle. This is a simple matter of choice. Apple are perfectly free to take their business elsewhere and no doubt told Pentagron that is what they would do. Pentagron remain free to take the risk Apple might do so. There is no rule under UK competition law that limits Apple's freedom to choose another supplier. It's difficult to conceive of their being such law anywhere, because it would amount to a restriction on a companies freedom to choose its suppliers. There are many reasons Apple might wish to avoid doing business with a party who also works on competitors products. That's their choice.
Though it should be. Sky used this tactic to destroy the satellite industry. Before they were big, they threatened Sat Shops. You were not allowed to sell competing kit if you wanted to be a Sky dealer. That is why most people are unaware that there are other birds in the sky that broadcast tv. They think that Sky is satellite TV. Try and buy a non Sky receiver in the high street and you'll see what I mean.
Yes, Sky is on my shit list as well as Apple.
Do you not see how those are different? Or are you just ignoring it?
On one hand you have Sky choosing who distributes their kit. I agree, that should be illegal because it's anti-competitive. It means that they have more receivers on shop shelves than competitors, so consumers have less choice.
On the other hand, you have Apple threatening to use another manufacturer. If they move to someone else, then it's not going to affect the amount of kit being produced, it's going to be the same amount of kit, for the same price, just manufactured by someone else. Why does it matter why they choose one manufacturer over another? What if they told a manufacturer that their prices were too high? Would that be as bad? It's essentially the same, it's just one company choosing one manufacturer because of certain criteria.
Look, if it was in a contract as an exclusivity deal, would you complain? Should there be no guarantee of exclusivity available? Is it unreasonable to broach this as a subject before spending money on drawing up lengthy agreements if it's a certain deal-breaker?
If you are a defense contractor and you are paid to provide a solution; yes a governemnt can prevent you from selling it elsewhere. If you have a product that you funded and developed, you can sell it to others, as long as there are not any export restrictions on place. See the difference, one you are paid to provide a solution and the other, you are selling a product. What Apple is doing is quite different. Apple made the design and contracts the building of it out. The manufacturer did not design the product and thus doesn't have the knowledge that Apple has in the design process. Just because you build it doesn't mean you have knowledge that can be shared. You don't think Acer hasn't bought a few iPads and disassembled them? All the manufacturer is doing, putting the various bits together and nothing more.
Your analogy is not accurate at all.
"If you're a defence contractor, doing work for a particular Government, that work is 'ring-fenced' (can't think of a better term). You aren't allowed to use the knowledge or ideas to assist a foreign Government to create similar technology."
Except Apple has no knowledge or ideas that are unique outside of packaging design. What would Pegatron share with their competition? How to make white boxes?
This is Apple threatening to take their toys and go home, no more and no less.
"It's obvious that Apple had to do a lot of research with manufacturers to perfect the unibody construction. "
you think so, it only been around since 1912 you know.
prior art and all that jazz...
http://en.wikipedia.org/wiki/Monocoque
"Monocoque (pronounced /ˈmɒnɵkɒk/ or /ˈmɒnɵkoʊk/) is a construction technique that supports structural load by using an object's external skin, as opposed to using an internal frame or truss that is then covered with a non-load-bearing skin or coachwork. The term is also used to indicate a form of vehicle construction in which the body and chassis form a single unit. The word monocoque comes from the Greek for single (mono) and French for shell (coque). [1] The technique may also be called structural skin, stressed skin, unit body, unibody, unitary construction, or Body Frame Integral. A semi-monocoque differs in having longerons and stringers.[2]"
"Design and development
In 1912 Deperdussin introduced a monocoque racer using a fuselage made up of three layers of laminated strips of glued poplar veneer, which provided both the external skin and the main load-bearing structure.[5] This reduced drag so effectively it was able to win most of the races it was entered into.[6] This style of construction was copied, with some variations, in Germany by Albatros and others however it was prone to damage from moisture and delamination.[7]"
However it may be a supply problem and Apple might be of the opinion that they would be able to sell more product if they had sufficient supply. Their is a chance, albeit slight, that Apple, and by extension Pegatron, would benefit more if Pegatron would commit the additional manufacturing capacity toward building MacBooks (not to be confused with McBooks or Happy Meals).
i quite agree. the story doesn't actually tell us what was said between the companies. it could well be that apple said "we're going to need X time more casing for the new macbook range" to which pegatron replied "we can't fill that order until after march because we're committed to producing X units for Asus" and apple answered "fine, in April, we'll add those X to our current order of Y... or we can take X+Y to another supplier"
there might not have been any specific threats, just standard business practice.
I know bugger all about the facts but you listen here to me, I think this is completely wrong! How can ( Who are they? Oh never mind! ), do this to another company?! With absolutely no knowledge of the legal system either here or indeed there, and certainly no idea about company law and standard business practices, I think this is totally wrong and very possibly illegal, although I haven't really got a bloody clue what I'm talking about! I just picked my legal knowledge of commercial law via some comments over at Ars Technica and Slashdot, so I don't know what I'm talking about!!!
Oh and I hate Apple/Microsoft/Samsung/Nokia/Linux/Uncle Tom Cobbley ( delete as applicable ) or whomever it is that we're all against this week!
Surely this is blatent monopolism at work here?
Didn't a company or several do this sort of thing including recently? Let's see, Microsoft with their browser? Not good enough how about the printer companies with ink cartridges? Still not recent enough? How about the Intel issue with forcing their CPU over AMD? Could be wrong but I can't see you guys over on the other side of the pond taking kindly to this and expect to be reading of a massive fine for crApple due to this. Unfortunately us merkins on the other hand will ignore the world opinion and side with the house that Jobs built^Wsued together because they are a "local" company who only operates with the beat intents....
As much as I hate Asus after they boned me out of roughly 7 months of a warranty seriously Apple do Fuck off already.
Do you actually have any documentary proof of this or is it a case of "everyone else says it, so it mush be true"?
The fact that no major PC manufacturer sells boxes with Linux pre-installed isn't proof that Microsoft is twisting their arms, it's proof that they don't think they can make money selling systems with Linux pre-installed.
No major OEM will accept to sell you a naked PC nor they will accept to reimburse you the Windows Voluntary Contribution (some are calling it a tax but that's not true) in exchange for returning back the unused copy of Microsoft OS. How is this for twisting arms ?
In case you need more info, you can educate yourself reading some juicy court documents from Comes vs. Microsoft.
Unless of course by 'everyone else' you mean technologists, lawyers and those close to the issues. It's pretty common knowledge.
"One of the ways Microsoft combats piracy is by advising OEMs that they will be charged a higher price for Windows unless they drastically limit the number of PCs that they sell without an operating system pre-installed." - http://www.justice.gov/atr/cases/f3800/msjudgex.htm#iiie
"Gassée says that Be was engaged in enthusiastic discussions with Dell, Compaq, Micron, and Hitachi. Taken together, preinstallation arrangements with vendors of this magnitude could have had a major impact on the future of Be and BeOS. But of the four, only Hitachi actually shipped a machine with BeOS pre-installed. The rest apparently backed off after a closer reading of the fine print in their Microsoft Windows License agreements. Hitachi did ship a line of machines (the Flora Prius) with BeOS preinstalled, but made changes to the bootloader -- rendering BeOS invisible to the consumer -- before shipping. Apparently, Hitachi received a little visit from Microsoft just before shipping the Flora Prius, and were reminded of the terms of the license." - http://www.kuro5hin.org/story/2001/10/23/13219/110
And of course, Microsoft are proving that they haven't changed one bit in 10 years - http://www.softwarefreedom.org/blog/2012/jan/12/microsoft-confirms-UEFI-fears-locks-down-ARM/
Wow so because Apple says no one else can use their OS and several companies like dell have tried and failed to use Linux; Microsoft is at fault. Good sir i suggest you look at what you are saying. Microsoft may not be the fairest company in the world but they do not force others to use their OS only. HP tried to make their own OS using Palm but still choose to use Microsoft. The Behavior you are complaining about is almost exclusive to Apple.
Perhaps you should buy a dictionary and learn to read. Improved grammer would help your cause as well.
I suspect you mean "monopsonism" rather than "monopolism". Both would be wrong (in the case to which you refer) by definition.
As I am quite sure you have never heard of a monopsonist, here is a random definition plucked from the web dictionary at www.dictionary.com
mo·nop·so·ny [muh-nop-suh-nee]
noun, plural -nies.
"the market condition that exists when there is one buyer."
You have absolutely no idea what spinning out means, you do?
Asustek effectively created Pegatron and allowed it to become an independant company. As can be seen by recent events, this has been good for Pegatron but less good for Asus... but there's absolutely no reason for Pegatron to take *revenge* on its parent.
How is this legal? Surel it isn't?
Haven't other well known companies (*cough* intel) been found very very expensively guilty of similar practices?
Another exaqmple of why so many despise apple and their practises so much.
For a company that is riding so high in stock value and market share, and indeed popular opinion, they sure seem determined to be heading for a massive fall...
Maybe this is exactly why it is riding so high in stock value.
A company whose COO (now CEO) gets a priapic fit from seeing worker dorms on factory site is a good fit with the stock market. Victorian style indentured labor has been known to produce excellent margins and high quality goods. More than one world power grew to prominence around this concept.
What exactly do you find surprising here?
Nothing to get over-excited about. In Japan, and I assume in Asia generally, it isn't that uncommon for big companies to have subsidised dormitories for single workers. I lived in one myself for ten months and I've no complaints at all about it. I don't know the specifics of the story you're referring to, but I think that your criticism misses the mark somewhat. Maybe you should have spent a little longer to craft a better researched/presented argument...
Legal where?
places like Taiwan and China have different legal definitions around this stuff.
It's likely to be fair game there.
What it is, is petty schoolyard crap. As for worrying about asus 'stealing' their design processes, aren't their zenbooks already rolling off the line? seems late to be making tweaks, plus judging from my Transformer Prime, they have the unibody finish down nicely!
As someone else pointed out, it seems to be a dirty trick to cost Asus some money retooling and maybe fear that they have made a competitive product.
Fair game indeed.
Schwinn outsourced a lot of its manufacture to a Chinese outfit called Giant. After they got the finer aspects of manufacture figured out, they got into the biz themselves, and helped drive Schwinn out of business. (someone bought the name later for the lowend stuff you see in Walmart) Then HTC was trained by Compaq as well. Foxconn now has a near monopoly on mfg. They could just about go rogue, and there is not a darned thing any single company could do about it if Foxconn decided to start stealing concepts.
Apple has a problem since it can't just yank its manufacturing and go somewhere else. Its a bluff. Unless Apple insources its manufacturing, it is going to be vulnerable to stuff like this. Where is Apple going to go if they won't cooperate? Another vendor who also manufactures competitors devices? There aren't very many manufacturing companies left. With everyone is using the same manufacturing facilities and parts, so how is one product better than another when its on the same line? Software is the only distinguishing factor now.
Didn't Microsoft put pressure on PC brands not to preload Linux? Can't compete, won't compete.
How exactly did Apple pioneer "thin and light" laptops? Laptops have been getting thinner and lighter every year for decades. It's not surprising that Apple has the thinnest and lightest because they are the most expensive, but the idea of making them thin and light is not Apple's alone. Fat and heavy (all laptops before the Air): http://www.microstar.net/museum/cpqslt286.jpg
Apple need anyone to - I think they might be doing it all by themselves quite well.
They've already ceased to 'innovate' such as it ever was (accusing Samsung of a 'Following' strategy when they've permanently been playing phone-tech-catchup). They're going out of their way to piss off some of the biggest companies in the world. They're pissing off their suppliers. They're actually starting to piss off their customers, too.
I can envisage a point where certain Asia-region companies decide it's too much trouble to deal with Apple and suddenly they have no displays for their devices, for example, and the only people that will do business with them are demanding several x the price cos they know there's nowhere else for them to go.
You can bake the trendiest bread in the world, but when you attempt to assrape the flour guy....
I have seen this coming for a long time and yet people ignore the warning signs because Apple are a cuddly family friend who would never do anything bad. This needs stopping now before Apple get any bigger as their behaviour will only get worse. This is corporate blackmail of the worst kind and Apple should be seriously fined over it, a substantial amount given how much they have in the bank that would make the shareholders take notice and do something about it as their share price plummets.
Just proving my point that no matter what Apple do, no matter how blatantly wrong it is they have a brainwashed cult who think it is fine. Replace the word Apple for Microsoft though and watch the bile spill forth. Anybody who thinks this is acceptable corporate behaviour really needs their head examined.
I swear the Apple faithful would watch Apple rape their wife, kill their children and rob them blind and still thank them for doing so
"Asus, came from zero just by good management and vision"
Wrong.
All four founders of Asus were already computer engineers at Acer and - funny, but true story - were actually involved in making some two of the first Apple II clones, the Microprofessor II and III, although a bit incompatible...
Funny how it goes in cycles.
Oh dear another clueless Digitimes article.
Fact is Asus OWNED Pegatron until June 2010 - but then decided to sell it.
Bad choice, now they're a customer as any other. The rest of the story is just Asus crying that Pegatron kicked their request to the curb. Probably Asus was hoping to pay peanuts too.
But go on fandroids you need your end-of-day pressure release, lest you go beat up the wife. Foam away your bitterness.
So it could do business as it pleased.
Look where it got them - bent over the Apple Barrel, apparently. ASUS will go elsewhere and you can bet other manufacturers will look at this and think 'Nah, cos they'll just be told not to make our gear and we don't need the cost of a manufacturer move in 18 months, we'll go with the other guys'.
Good luck winning NEW customers with everyone thinking that.
Another walking dead company. If that's fandroid bitterness foaming away then it's fewer syllables to say 'reality' instead.
My deity, there's nothing like an 'apple dun wrong' story on el reg to get those thumbs flying.
My take? Heck, check out the specs and the prices between the two devices (I'm a poet)
There's really not that much in it - £100 higher for the macbook air 1.7ghz 4gb ram vs. Asus 1.6ghz 4gb ram.
And while your at it, if you really must go for a device of this nature (I'm so jealous, you wealthy bastard!), get the ASUS and tell apple to stick it.
Heck, go one further, dual boot the sucker by taking a spin over to Tonymacosx
Thumbs down Thumbs down!
You have 39 Billion $ in the bank doing nothing. Build you own factory and make things your way. Sure you will have to deal with unions and get sued regularly for work conditions, but you can afford it and lets face it, you are no stranger to the court system.
You may as well. Why? If you keep ticking off your suppliers you might find your new Cupertino engineer hires whittling iPod cases out of blocks of wood in their spare time instead of researching fake products. On the up side, your marketing folks are well rehearsed in sending out "We are so popular there are shortages everywhere" press releases so limited public relations damage then.
Last tip. Tie a generator to Steve Jobs feet. You can power the new Cupertino Mega-Corp HQ just from the power of him spinning in his grave.
"Clearly illegal"?
Not sure what is clear about it. One, it's not bound (to my knowledge) by US laws as this act is not commited in the US (and besides, good luck getting the US to sue a major US firm for it's actions outside of the US) , only local laws and two, I don't think it is actually illegal. It's dirty, underhand and vile business practice but not I think illegal. To my mind it's just another example of Coporate Bullying by the leaders in it.
I am sure Apple didn't go out of the way and say "make PCs for anyone but us and will kill your profits bitch", their legal team is much too well paid for that, but there's always more than one way to skin a cat and many of them, in this sort of game, are completely legal. The CEM has the "choice" to make one item over and above another, and it has a "choice" with what it wants to happen to it's profits.
As for Apple becoming verboten within China, ASEAN etc, I think they kind of have enough money to ensure that at a Govt. level that won't happen.
By the way, yes I am massively anti Apple but I am in Electronics Manufacturing so I've seen "similar" behaviour from some places (obviously nothing to this scale) so I sort of get it, I just don't approve as I feel it's an unethical way to behave in life and business.
That's a nasty move on Apple's part. But that seems to be their strategy.
On the one hand, produce products people want to buy and sell them at top dollar, and on the other hand, use every trick in the book (and patent some new tricks) to prevent other companies from competing with you. Their vast size gives them a much larger club for the latter.
Just had a look at http://zenbook.asus.com/design/ and it all seems so innovative. Amazing stuff.
"They [Asus design team] were also going for a seamless and smooth look, with an embedded keyboard and an oversized, integrated touchpad that would be roomy despite the overall compact form factor of the machine. Keeping the proportions just right was critical."
Actually I could swear I had seen all that before, but must have been in my dreams.
Here's to you Asus for bringing us innovative products. You go and get them with your "new fabrication and assembly processes" and "new machining tools." /s
This is what you should expect when you offshore your companies primary operation and turn yourself into little more than a brand.
When you engage a foreign company to build your shiny gadgets you are effectively teaching them how to produce shiny gadgets and it is inevitable that they will take that new found knowledge to produce similar products in competition.
You can't have it both ways. If you want to be the only company that has the know how to produce a product then you simply shouldn't be teaching other companies how to do it.
Apple are not the only company to get burnt like this. It happens all the time.
In fact apple have, to my knowledge, so far managed to resist the temptation of off-shoring their design as well. When western companies do that (and they do it regularly) they essentially strip themselves of all value, leaving nothing behind but The Brand.
HP are a classic case in point.
But it is not just IT companies that do this.
<The new, UTTERLY IDIOTIC 2000 CHARACTER LIMIT forces me to continue this on the next post>
It is especially common in cases where western companies are actively engaged in chasing the lowest possible production costs. An example would be in the manufacture of running shoes.
Usually this entails setting up a factory in a third world country and running it for a few years at subsistence level wages.
Eventually wage pressures force costs up (sometimes by only a very small amount) because strangely enough, people being people after all, the workers at these plants see them as simply the first step in a process to better their own situation.
This of course is at odds with The Brand, because they expect workers to sell them their labour at perpetual bargain basement prices which of doesn't happen.
This eventually leads the geniuses in charge of The Brand to up stumps and move in search of some new peasantry who are willing to man a factory at subsistence levels wages for them again.
The trouble is that the original factory is still there, as are the workers.
Also, quite often it just happens that the local government there (and perhaps fledgling business entrepreneurs) are more than willing to continue operating the factory making pretty much the exact same product that The Brand makes, but without the crippling overheads, which are usually made up of massive marketing budgets and executive remuneration packages.
It's a massive fail on behalf of business management, short term-ism trumping long term vision and burning them in the long run.
Following this logic there would be tons of almost identical running shoes hitting the market at much lower prices, since 'The Bran'd shoes cost a fortune. I don't see this happening.
Cheapo running shoes are just crap, and all the decent ones are getting way more expensive all the time.
Where the hell is this 'competition bring the price down' I keep hearing about?
Then I think they can do this. But otherwise Apple should calm down, barring a clause in their current contract that specifies that Pegatron will not manufacture competing products.
Apple can always say that they will take their business elsewhere when their contract with Pegatron is up, that is their choice, and I don't see why Apple should be forced to live with this situaton forever if Apple doesn't like it. But pushing people around when Pegatron is within their contract and contractual rights is rather obnoxious.
For gods sake effing grow up Apple! You may well "make" good products (actually you make f-all, just market shit that someone else makes for you) - yes I have several of aforementioned products - but you are becoming the schoolyard bully who cries to mummy when he doesn't get his own way. Frankly If I did not believe that your products were the best for what I need, I'd drop you like the proverbial hot potato.
People who develop irrational blind hatred, especially that born of jealousy that is reinforced daily, need to vent constantly, rather like a steam boiler.
Just to point out the obvious, this Register piece is a redacted version of an article that apparently appeared in a Chinese Language newspaper (Commercial Times). It is therefore by definition, not entirely reliable, and almost certainly incomplete. Yet the APPL haters are out in force making statements which have no basis in the article here, or for all I know, in the original piece. Many of the statements assume knowledge of contract content, Taiwanese law etc. The posters have no possible access to this information. Good grief, someone is proposing that APPL will fall foul of US legislation, calling APPLs actions "monopolism" etc. - these are demonstrations of such an astounding level of ignorance that it is hard to believe they are written by sentient beings. The frequency of this style of comment is rather sad.
The mindless, ill-informed vitriol directed at APPL poured out here at The Reg again and again dilutes the worth of the forum, where once intelligent commentary was the norm.
philip
That, seen similair tactics used by big buyers from manufacturers, you give 30 days, well we shall pay you in 60 or so, you won't dare charge us late fees because you are now to scared and vulnerable to piss us off and have us go elsewhere.
Selling your own line, not anymore we wont take on your goods if it's names is associated with something else, of course we don't insist we just happen to be counting out this money in front of you and browsing through these alternate supplier brochures.
Manufacturers tied to one company are the easy to shaft whether its done legally or not.
Sounds evil but possibly understandable. There's a long tradition of far eastern manufacturers "borrowing" bits designs of kit they are making for Western companies. In Alan Sugars autobiography he states he always made sure he owned the tooling for his kit + he used his own custom chips made elsewhere in order to keep these problems to a minimum.
Apple might be playing evil as usual, or they might be preventing some of their manufacturing techniques ending up in other peoples kit.
If Apple moves it's production to America I will buy Apple instead of Android. Until then, if I have to choose between a Chinese product (Apple) and another Chinese product (Android phone/tablet), I will just get the one that is more open.
I know that Apple writes their software in North America, but so does Google. So there is no difference here. If my neighbours to the south will start making phones though, I will buy them even if they are a bit more expensive.
The Register 
Biting the hand that feeds IT
Copyright. All rights reserved © 1998–2025
