Apple just got fucked by China, badly.

[LJ_Reloaded]

Or, to be more specific, one Chinese dude.

http://news.yahoo.com/chinese-man-makes-ipad-look-scratch-091234153.html

Chinese man makes iPad look-a-like from scratch

An enterprising Chinese man has come up with a solution for gadget-crazy people who desperately want Apple's popular iPad tablet computer but cannot afford it -- DIY.

In a 20-minute video posted on Youku -- the Chinese YouTube equivalent -- Liu Xinying demonstrates how to assemble an iPad look-a-like using computer parts, a touch screen and a case with a keypad, to the sound of metal music.

At the end of the video dubbed "DIY IPAD 3", the IT whizz shows off the finished version -- an apparently functional tablet computer that looks like a thick iPad but runs on Windows, an operating system made by rival Microsoft.

News of Liu's apparent feat spread on several foreign and Chinese technology websites, as well as on the nation's Twitter-like Weibo service.

When contacted by AFP, the 21-year-old from the eastern province of Shandong said that since he posted the video online a month ago, he has knocked back requests from a dozen pepole wanting him to make them a DIY iPad.

"I did this for fun," said Liu, who works at a computer store in Jinan city.

"It cost me 2,000 yuan ($309) to make it, so I guess that's how much it's worth."

By comparison, the cheapest 16-gigabyte version of the iPad 2 sells for 3,688 yuan in China, while the most expensive 64-gigabyte model costs 5,288 yuan.

iPads and iPhones are hugely popular in China -- the world's largest Internet market with 457 million online users -- and the launch of new models has been known to trigger fights and even crimes.

Last month, a court in the southern province of Guangdong sentenced three people to prison for stealing the design to the iPad 2 and using it to make fake tablet computers.

And Apple was forced to compensate a customer who sustained injuries in a fight at its Beijing flagship store in May, when the iPad 2 was launched.

 

[pointless]

yes, i'm sure they'll closing down apple any time now.

 

[KRCummings]

yes, i'm sure they'll closing down apple any time now.

So you don't see an inferior product that runs on an inferior OS for just barely less than the real thing as a threat? That's just silly.

 

[pointless]

So you don't see an inferior product that runs on an inferior OS for just barely less than the real thing as a threat? That's just silly.

i really like how he estimated it's worth based on unit cost. poor, poor "communist" just doesn't get capitalism at all.

 

[phrodeau]

I'm sure that explains why these have been on backorder:

http://www.roddenberry.com/props/prop-replicas/star-trek-tng-ds9-padd-prop-kit-large.html

 

[evesdream]

i really like how he estimated it's worth based on unit cost. poor, poor "communist" just doesn't get capitalism at all.

I was thinking the same thing. Cost of labour, overhead, profit margin. Someone save this man from himself.

 

[LJ_Reloaded]

I was thinking the same thing. Cost of labour, overhead, profit margin. Someone save this man from himself.

You guys are all missing the boat here. It's called the "Get this, not that" effect. The only thing that saves Apple's ass here is that most sheeple decide not to "get this, not that", because Apple has name recognition.

Basically, this guy has devised a way to cut Apple out of the market for those who wish to pay less. This is not about him competing with Apple. This is about cutting out a significant portion of "labour, overhead and profit margin" costs from the making of your own iPad equivalent.

Let's say you can buy a jar of Skippy's peanut butter at the store or you can buy the shelled peanuts and grind them at home, all for a cheaper price. If enough people find the latter to be more economical, then Skippy's is in deep shit. Get this, not that. The "labour, overhead and profit margin" costs that Skippy loads onto the price of your peanut butter, is now eliminated for you.

Another example. Suppose you have the option of buying a computer with Microsoft Windows 7 or getting one with Linux Fedora 15. Also suppose, for argument's sake, that Linux Fedora 15 is close to equivalent enough to Windows 7 that you can do everything you need in Fedora 15. Now consider the cost of Windows 7 vs Fedora 15. Windows 7 Home Premium costs $50 (although it is sometimes bundled in with the cost of a PC) while Fedora 15 costs $0 (which theoretically means you can skip Windows 7 and take $50 off the cost of your PC). Get this, not that. The "labour, overhead and profit margin" costs that Microsoft loads onto the price of your PC, is now eliminated for you.

Basically, you've taken a sizeable chunk out of the companies' profit margin. In example #1 you pay the peanut farmer for the peanuts and took a one time charge for the grinder, but by eliminating Skippy's you are no longer paying for the peanut grinding and bottling middle man PLUS the peanut farmer. One of the two companies has been cut out of the market. In example #2 you paid for the computer so the computer maker is still getting a profit, but Microsoft has been cut out of the game.

In the case of the iPad you are not only paying Apple, but also all the parts manufacturers that built the device for Apple. By building this iPad knockoff with Windows you have an iPad type tablet with access to Windows apps. Anyone want to guess which, between Apple and Windows apps, has the most market share? If this became a popular option you are paying parts suppliers and you might even be able to get a better deal, but you are not paying Apple, and you've got a tablet that can run more apps than an iPad, too. And the kicker? You paid 2000 Yuan versus almost 3700 to make an iPad knockoff that runs more apps than an iPad. And you shaved a ton of "labour, overhead and profit margin" off the cost of your device, too. And did I mention that you now have more apps at your disposal?

If I were Microsoft I would ride this wave. I would hire this guy, get out a competing product, and slap Windows on it. Now Apple's in real deep shit - even if you factor in Microsoft's "labour, overhead and profit margin", you have a competing product that runs far more apps than the iPad. Whoops.

And if Microsoft is capable of taking Apple vaginally by highballing them, then Linux is in position to take them anally with the lowball. Using Liu Xinying's example, you could install Linux on the device and cut out the price of Microsoft Windows from the cost of your iPad replacement. Linux has tons and tons and tons of apps, almost as many as one would find for the iPad.

Allow me to explain this in another way. For the iPad you are paying for unit cost plus "labour, overhead and profit margin". Liu Xinying's way has you paying the unit cost only by going the "get this, not that" tactic. See the fundamental difference?

 

[LJ_Reloaded]

Bump. A buncha people here know so little about economics.

Here's the video:
http://v.youku.com/v_show/id_XMjYzODc4MDk2.html

You can see that Liu's point is that you can build an iPad equivalent without bothering with the cost of labor, overhead and profit margin.

It's odd that people here fail to understand what it means to cut that out of the price of your iPad-equivalent. Much less the added value of replacing Apple's OS with Windows and getting access to all the apps that come with Windows...

 

[LJ_Reloaded]

http://www.youtube.com/watch?v=GpZX2GZGQew
^^^ Youtube version (if you can't reach the Chinese one)