Fascinating stuff, thanks Ben. Surprised Apple’s ARM transition was your go-to example of a cost moat though. Whatever they’re saving in components is surely heavily offset by all of the extra R&D, porting, tool building etc? For my money it’s more about performance, power consumption and hardware/software integration, and they’d have still done it if the chips cost as much as Intel’s. Lots of other moats in that though :-)
I agree that there are a few moats here, David. Though, I think the short term costs of R&D, fabrication etc will ultimately result in significant efficiencies of cost, not least in that they won't have to tolerate margin from Intel. I also assume there will be secondary benefits, but these will all ultimately be realized in profits. Regardless, it will be interesting to see how Apple's numbers on their computer lines look 3-4 years from now when the transition is complete, won't it?
Fascinating stuff, thanks Ben. Surprised Apple’s ARM transition was your go-to example of a cost moat though. Whatever they’re saving in components is surely heavily offset by all of the extra R&D, porting, tool building etc? For my money it’s more about performance, power consumption and hardware/software integration, and they’d have still done it if the chips cost as much as Intel’s. Lots of other moats in that though :-)
I agree that there are a few moats here, David. Though, I think the short term costs of R&D, fabrication etc will ultimately result in significant efficiencies of cost, not least in that they won't have to tolerate margin from Intel. I also assume there will be secondary benefits, but these will all ultimately be realized in profits. Regardless, it will be interesting to see how Apple's numbers on their computer lines look 3-4 years from now when the transition is complete, won't it?