Yeah but Apple 30+% margin on the product. I can see the vendors scraping by with 3-8% margin play this kind of game but long term Apple isn't going to have 30+% pricing power if move to shlock products.
Unfortunately, this isn't the case. Cost cutting is running amok even for top tier products these days. Nor is it limited to specific industries.
Anything from premium electronics to hand tools, even where very high standards are required, such as aerospace (hint: Boeing's CEO openly stated he wants to move production to China), to recycled parts being used in implanted medical devices (used, defective leads installed in items such as pace makers and defibrillator's that caused the death of patients).
BTW, Apple's gross margins, even on the base MP's, is in excess of 50%.
It was probably cheaper but there is a significant amount of laziness in Apple's suppler actions too where they just pick one factory/vendor for total worldwide production. In trying to squeeze more out of vendors they combine tasks as leverage to squeeze out more margin.
I think it comes back to bite them in the butt most times on this front also.
I suspect there isn't an industry left that doesn't cut corners in order to increase their margins anymore.
But bear in mind that Apple's decisions were based on two requirements; one would be the lowest cost, and if the supplier/s (added together if more than one), could meet their quantity requirements. Whichever supplier or group of suppliers can (or Apple believes they can) meet both of these goals, will get the contract.
Why do you think they're still doing business with Samsung, given all of the negative press regarding their feelings towards them?
Money talks, the rest is hot air in business thinking.
Business typically isn't fine with it when profits dip in the out years. Right now hypergowth iPhone money is covering up for some pretty sloppy stuff. Apple's has got some Dilbertesque pointy head boss moments going on right now in middle management.
From what I've seen, it's the business decisions that are almost always the root cause behind such issues.
One of the major ones, is cutting R&D down to below what's needed to keep existing products competitive and new/replacement products in the pipeline to cover when a segment/product line has run it's course. Nor is this a new issue, even in the realm of computers (Commodore immediately comes to mind).
And as per where it originates, I promise you, it comes from the top. It's their responsibility to know what's going on in the company, and although they play dumb and point the finger when the brown stuff hits the fan, if you actually dig, you'll usually find it originated from the top (i.e. cost cutting email memo sent out to all middle management). Middle management just takes the blame.
But there is a balance that is necessary to be a leader in quality and innovation.
You and I may understand this, but
MBA's do not as a general rule.
Please understand, it originates in how they're taught; which is that all business is the same, regardless of the products/services offered. So they take that as "we don't need to fully understand our products/services because it doesn't matter". What this translates to in the real world, is they don't have a real clue as to what's actually going on in the company they're tasked with running, let alone the real world. The extent of this disconnect is absolutely amazing, but it's real (every watched any episodes of "Undercover Boss"?).
And not knowing/fully understanding your product line and the market it's sold in = deadly for the company. It would be like putting a blindfold on a captain while sailing through mine field and expecting everything to go perfectly.

They truly do not understand this, which is why so many great companies have vanished in the last three decades or so in particular.
This is made even more difficult when these companies have so many different products and services due to mergers/buyouts/acquisitions, that they can't master any of them if they try.
Yet smaller/mid-sized companies that have remained as specialists are doing fine comparatively speaking.
And they appear to be loosing share to Lenovo which hasn't followed that path. (Lenovo is sitting on higher growth markets though).
When Carly dropped Hewlett/Packard from the name, I didn't think she was doing them a favor at the time. As proceeded to crush HP at least it was just initials.
What's happened at HP is just sad and disgusting IMHO.

They keep shifting from one idiot to another, each one making things worst off than the last.
That is what is so lame in Apple's case. They've got money coming out of their eyeballs. More money than they know reasonably know what to do with. So to play the short term gimmick game is ridiculous.
Their bonuses are based on the short term earnings, so that's why they're fine with it. Simply put, personal greed.
It's even gotten to the point where CEO's and the rest of the BoD have run the companies they were tasked with running into the ground, yet walked away with fortunes while everyone else (investors + customers) were completely screwed.
If short term profits were key issue the Mac Pro would be in good shape. Growth is the problem. Nickel and diming on suppliers isn't going to fix that.
See above.
What we're seeing is the aftermath of Supply Side Economics (Keynesian, neo-Keynesian, and more recently, Milton Friedman <from the Chicago School of Economics>). And the reason there's no growth?
As per a lack of growth, it really comes down to the fact they didn't keep up with R&D, and the reduction in real employee wages (less disposable income than in past decades) have damaged the domestic market. Put the two together, there's not enough improvement to entice buyers to purchase newer goods, and in the rare instance they are interested, they may not have the funds to buy it anyway.