I know Apple is escaping it due to their large contracts but I’m honestly not sure how at this point. They must have pre-purchased multiple years of memory or otherwise have a really insane contract.
But what’s puzzling about that is, why don’t other manufacturers have the same kind of deals? It’s not like Lenovo is a low volume supplier.
Obviously, the iPhone sells in volume unmatched by other devices. But still…I’d have to ask why other high-volume brands like Samsung have wildly expensive laptops.
It just seems like the other companies are asleep at the wheel and don’t have any passion for their strategy, to the point where a tiny company like Framework is overperforming just by caring a little bit. Sure, they can’t beat Apple on raw value but they at least they put together a laptop with a respectable trackpad and a CNC body. Where is volume leader Lenovo?
It's not like designing your own part is free, but Qualcomm charges a very healthy margin on top of their manufacturing costs.
Apple also invests in designing the tooling and processes used on their manufacturing lines.
For instance, they cut way back on how much CNC time was required to produce the Neo.
If lenovo is buying a billion chips a year, why can’t they lock in like Apple?
You can't lock in prices forever, though. The more volume and stability you have, the more a vendor will be willing to enter long-term agreements with you. Lenovo has less volume than Apple and is not in as great of a financial position, so they don't have as much leverage.
The bigger factor is that Apple already had more margin in their products. The price premium for RAM upgrades on Apple laptops is large, as everyone knows. They could absorb more RAM price increases without being forced to raise retail prices.
In the consumer space, I recently bought a Sonicare toothbrush, and the number of models and combinations is staggering. 1000x plaque removal, 750% plaque removal, it's ridiculous.
So Dell, Lenovo, et Al end up trying to address every niche except the focused product catalog niche.
Dell and Sonicare do not have that luxury. They are competing with other PC vendors and other toothbrush vendors.
The strategy is to produce so many models that you appear to serve every price point and need without requiring the user to shop around. You can find something in their lineup that fits your budget or requirements if you look long enough and you don't feel like you need to go looking around at competing vendors as much.
Having may models isn't a high cost because they share so many parts. I bet if you opened multiple Sonicare toothbrushes they'd share many main components like batteries or motors. Dell has a few laptop and desktop lines but they're different combinations of parts within a shared chassis.
Lenovo controls less of the stack than Apple: CPUs (Intel/AMD), BIOS, operating system, etc. While ostensibly Apple and Lenovo are both selling personal computers, Lenovo is in a (sub-)segment of the market that is commoditized with Dell, HP, etc.
If you need to run Windows and associated (Windows-only) apps, what's special between Lenovo/Dell EMC/HP/etc? How much of a difference is there between Coke and Pepsi?
A lot of vendors hitched their wagon to the Wintel duopoly, and now they're all riding (or being ridden) herd.
More importantly, if you have a locked in price you can sell your products for more profit - or you can sell the things that you have locked in and not have to make the rest of the widget at all. Sometimes someone will give you a good deal to buy out your locked in contract.
Apple is #4 in PC volume but they certainly make up for it with their smartphone volume.
And of course, they have a lot of service revenue to pad the balance sheet.
Apple’s only structural advantage should be their custom silicon, but I don’t think that’s a cost advantage as much as it’s a performance and battery life advantage. Apple is still buying huge dies from TSMC and designing them custom themselves which is not cheap. Lenovo shares the cost of designing an Intel, AMD, or Qualcomm chip with dozens of OEMs. Same deal with software: I wouldn’t be surprised if macOS costs more per unit for Apple than Windows costs for Lenovo considering all the employees Apple hires directly to develop it.
Apple in theory should be paying a pretty similar amount of money to make the rest of their systems. They don’t make camera sensors, displays, keyboards, DRAM chips, or anything else themselves.
Apple also makes healthy margins on its hardware products.
They do this for their own reasons but it's helping them in this crisis. They can simply accept lower margins in the short term, in the knowledge that in the long term these price fluctuations even out.
From the perspective of the producers Apple are a consistent purchaser with deep pockets. AI companies may be willing to pay more for RAM in the short term, but Apple is a safer customer. The current AI bubble may or may not burst, but people will keep buying iPhones regardless. The producers do not want to freeze Apple out because Apple is their hedge against the bubble bursting.
Lenovo may not be a low volume purchaser but they are not at Apple's scale nor are Lenovo's customers willing to pay the premium that Apple's customers are.
Also, their computers have been getting more storage/RAM competitive as time has gone on. Literally just by time passing and prices staying the same.
Lenovo is beyond Apple’s scale when it comes to PC sales. They are #1 in volume. Apple is #4. Apple sells more iPhones but Lenovo does also own Motorola which is not nothing. We can also look at Samsung: a wildly high volume company who has their own production lines of major components like RAM and displays but they still sell their 2026 laptops at eye watering price increases.
Apple literally buys displays from Samsung.
