• Apple's Custom Chips: A Genius Decision?

    Within a decade, Apple twice changed its mind about where the boundaries of the firm should lie. In 2010 the company introduced an Apple-designed custom "system on a chip" (SoC) for its iPhone and iPad products, which replaced non-customized Samsung chips. Then in 2020, Apple announced that it would end its 15-year partnership with Intel and begin designing the microprocessors inside its new Mac computers. This was the second time Apple had switched microprocessors in its computers. From 1994 to 2005, Apple computers ran on IBM PowerPC microprocessors, which were incompatible with the dominant Intel x86 chip architecture. At the time, Apple had only a 4 percent share of the personal computer market. In 2005, the company announced it would switch its Mac computers to Intel chips to take advantage of Intel's industry-standard architecture and superior product roadmap, which would enable Apple to build the products it envisioned. In November 2020, Apple unveiled three Mac computers that used its new custom M1 processor. Apple's custom chip contained numerous special-purpose accelerators that enabled performance and capabilities not accessible with off-the-shelf chips. As it did when it switched to Intel microprocessors, Apple provided software emulation technology that enabled existing Intel-based apps to run on the new Macs until they were updated to work with the new Apple chips. Huawei and Samsung had developed custom SoCs for their smartphones, but no other personal computer company followed Apple's path.
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  • Grocery Delivery in the US: Trying to Bag Profits

    Since 1989, US companies have been trying--mostly unsuccessfully--to marry the ease of ordering groceries online with the convenience of home delivery. All have learned that the combination of customer demands and logistical challenges has made it difficult to be profitable in this space. Unlike retailers of standard items (such as books), sellers of groceries had to exercise judgment when selecting fresh meat, fruits, and vegetables to satisfy consumers' tastes. Once selected, many items needed to be packed in specific ways and required timely delivery to maintain freshness and quality. In addition, the "last mile" of delivery was costly and highly variable between high-density urban customers and those in more dispersed suburban and rural communities. Customers were familiar with in-store prices and resisted paying more, a preference reinforced by Amazon and other online retailers, which had created an expectation that online prices should be the same as--or even lower than--prices in stores. In addition, customers had a strong aversion to delivery charges, even if delivery saved them time. They also much preferred the convenience of narrow time windows for delivery and had a low tolerance for mistakes.
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