Coevolving Innovations

… in Business Organizations and Information Technologies

Currently Viewing Posts Tagged kenneth kraemer

Value capture in a global innovation network

With the primaries in the United States making headlines, Americans have been making noises about revisiting NAFTA. Michael Hart and William Dymond provided a Canadian perspective1, with a global perspective on the larger trends.

If our neighbours elect a Democratic president, Senate and House on Nov. 4, things could get ugly, as a falling U.S. dollar, the credit crunch and serious troubles in the housing market add to recession anxieties.

The target for much of that ugliness will be China and other low-cost suppliers to the U.S. consumer market. Most Americans do not have much understanding of the role of these suppliers in maintaining U.S. economic activity. Both politicians and the public fail to realize the benefit of Chinese manufacturing goods produced to U.S. design and using U.S. technology. A recent University of California study found that, of an Apple iPod sold in the U.S. for $299, $160 goes to American companies that design, transport and retail iPods. Only $4 stays in China with the firms that assemble the devices.

I was curious about that $4, and tracked down the report to the Personal Computer Industry Center (PCIC), part of the Alfred P. Sloan Foundation. The paper by Dedrick, Kramer and Linden2 has some interesting tables. Here’s a breakdown from the $299 retail price of the iPod.

Table 5. Derivation of Apple’s Gross Margin on 30GB Video iPod

Retail Price $299  
Distributor Discount
(10%)
($30)  
Retailer Discount
(15%)
($45)  
Sub-Total (estimated
wholesale price)
  $224
Factory Cost ($148)  
Remaining Balance
(estimated Apple gross margin)
  $76

Source: Authors’ calculations; see text

With the primaries in the United States making headlines, Americans have been making noises about revisiting NAFTA. Michael Hart and William Dymond provided a Canadian perspective1, with a global perspective on the larger trends.

If our neighbours elect a Democratic president, Senate and House on Nov. 4, things could get ugly, as a falling U.S. dollar, the credit crunch and serious troubles in the housing market add to recession anxieties.

The target for much of that ugliness will be China and other low-cost suppliers to the U.S. consumer market. Most Americans do not have much understanding of the role of these suppliers in maintaining U.S. economic activity. Both politicians and the public fail to realize the benefit of Chinese manufacturing goods produced to U.S. design and using U.S. technology. A recent University of California study found that, of an Apple iPod sold in the U.S. for $299, $160 goes to American companies that design, transport and retail iPods. Only $4 stays in China with the firms that assemble the devices.

I was curious about that $4, and tracked down the report to the Personal Computer Industry Center (PCIC), part of the Alfred P. Sloan Foundation. The paper by Dedrick, Kramer and Linden2 has some interesting tables. Here’s a breakdown from the $299 retail price of the iPod.

Table 5. Derivation of Apple’s Gross Margin on 30GB Video iPod

Retail Price $299  
Distributor Discount
(10%)
($30)  
Retailer Discount
(15%)
($45)  
Sub-Total (estimated
wholesale price)
  $224
Factory Cost ($148)  
Remaining Balance
(estimated Apple gross margin)
  $76

Source: Authors’ calculations; see text

  • RSS qoto.org/@daviding (Mastodon)

    • New status by daviding October 9, 2019
      Declarations of sapiosexuality may describe individuals seeking partners for intellectual intercourse.> A self-described “sapiosexual," someone who is primarily attracted to intelligence over physical appearance, Van Dusen says she now screens her dates for post-secondary education. [.....]> Many sapiosexuals acknowledge the term can come off elitist, but in the often superficial world of online dating, they […]
    • New status by daviding August 19, 2019
      In the Canadian press, this is attributed to inverted yield curve, resulting from the trade war. > Anyone buying that bond is willingly buying an investment that's guaranteed to lose money, but investors are more than happy to buy it up - because the fear is that alternative investments will fare even worse. [....]> Those […]
    • New status by daviding August 19, 2019
      There's something seriously wrong in the global financial markets, when banks are offering mortgages at zero or negative rates. > Jyske Bank, Denmark's third largest, has begun offering borrowers a 10-year deal at -0.5%, while another Danish bank, Nordea, says it will begin offering 20-year fixed-rate deals at 0% and a 30-year mortgage at 0.5%.> […]
    • New status by daviding August 18, 2019
      Web video of Systems Changes: Learning from the Christopher Alexander Legacy, extending #patternlanguage especially Eishin School and Multi-Service Centers methods-in-practice. For #SystemsThinking Ontario, up the learning curve on ongoing research. http://coevolving.com/blogs/index.php/archive/systems-changes-learning-from-the-christopher-alexander-legacy-st-on-2019-02-11/
    • New status by daviding August 16, 2019
      Web video of presentation of Evolving Pattern language towards an Affordance Language, 2018, on week visiting#RaphaelArar and #JimSpohrer at Almaden. Insider's history of science and prospects http://coevolving.com/blogs/index.php/archive/evolving-pattern-language-towards-an-affordance-language-almaden-2018-05-09/#systemsthinking #patternlanguage
  • RSS on IngBrief

  • Recent Posts

  • Archives

  • RSS on daviding.com

    • 2019/11 Moments November 2019
      Wrapped up paperwork on closing out family buildings in Gravenhurst, returned to classes and technical conferences in usual pattern of learning.
    • 2019/10 Moments October 2019
      Tightly scheduled weekdays at Ryerson Chang School, weekends in Gravenhurst clearing out family building as we're leaving the town permanently.
    • 2019/09 Moments September 2019
      Full month, winding down family business in Gravenhurst, starting Ryerson Chang certificate program in Big Data, with scheduled dinners with family and friends.
    • 2019/08 Moments August 2018
      Enjoyed summer with events in Toronto, followed by trips back my home town Gravenhurst, staying overnight for the first time in over 30 years.
    • 2019/07 Moments July 2019
      Busy month of living every day of the summer to the fullest, visiting family and friends, enjoying the local sights of the city.
    • 2019/06 Moments June 2019
      Summer arrived in Toronto, with the month ending in travel to BC and Oregon.
  • RSS on Media Queue

  • Meta

  • Creative Commons License
    This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License
    Theme modified from DevDmBootstrap4 by Danny Machal