Apple is never happier than when announcing a flagship product has been made just a little thinner.

It happened last week with the Apple Watch, which is 0.7mm thinner than its predecessors. Before that, the iPhone lost more than half its thickness over the course of a decade. The iPad has slimmed down significantly from its first iteration. And who could forget the introduction of the MacBook Air, plucked with fanfare from a manilla envelope.

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Steve Jobs loved a good reveal.

Every time this happens, you can set your watch by a chorus of onlookers and faithful Apple customers both asking the same thing:

Why can’t we have a few more hours of battery life instead?

With all the extra volume Apple’s miniaturizations have carved out over the last ten years, it’s conceivable they could have doubled the battery capacity of their most popular products. Smaller components means the possibility of more room to store energy.

Instead, we get a march toward smaller and lighter devices.

There’s a strategic reason for this which can teach us a lot about 21st century economics.

Information goods

Information technology pervades every aspect of our culture and economy. Even physical products now have deep information roots. As Paul Mason’s Postcapitalism describes:

In hi-tech engineering, before a single piece of metal is shaped, objects are designed virtually, tested virtually and even ‘manufactured’ virtually — the whole process modelled from start to finish — on computers. The mistakes are discovered and rectified at the design stage, in a way that was impossible before 3D simulations came about.

Which means that the outcome of a research and development process can now be cheaply duplicated by anyone who has access to the basic machinery to convert digital plans and schematics into finished goods. Competitors can produce alternatives or counterfeits that cost little more than the raw materials, tools and labor necessary. Because these competitors have minimal R&D costs, they can undercut the original producer, destroying their profit margins.

In Mason’s words, information tech “corrodes” prices over the long term.

Many who shop on Amazon or Ebay have first hand experience with this phenomenon. Both services are rife with counterfeits sold as the genuine products of the brands they’re emulating, often at discount. This presents meaningful challenges for small companies selling basic hardware. Elevation Lab designed a clever but easy to manufacture hook for storing headphones beneath your desk. They quickly found themselves competing with counterfeiters:

They literally reverse engineered it, made steel compression molds, made the logo wrong, used fake 3M adhesive that’s very thin and was diecut smaller than the top (measure once, cut twice), they use a lower durometer silicone so it flexes more, its has huge mold parting lines, and the packaging is literally photocopied then reprinted (you can tell by the lack of image contrast). And they had to apply a big sticker to cover our SKU with theirs. But to the untrained eye, it would pass.

Elevation Lab was unable to maintain a monopoly on the basic inputs that yielded their product. The design schematics, manufacturing tooling, and even packaging could be approximated by a third party wielding the power of information-based design and production.

It is into this future that Apple is sailing.

Apple’s monopolies

Here it is helpful to define our terms.

Monopoly is a loaded word. The Bell Telephone Company once held an absolute monopoly on all US telephone service. Microsoft had a monopoly on computer software in the workplace, controlling more than 90% of desktops in the 1990’s.

But monopoly can exist even without this level of market dominance. You can be the exclusive purveyor of a product without being the exclusive purveyor to an entire market.

This is the position where Apple finds itself. It doesn’t come close to selling all of the world’s smartphones.

Yet it maintains a tight control over several inputs that make an iPhone:

  • iOS, the operating system that drives all its non-Mac computers
  • Their processes and designs for creating the custom chips that now drive the iPhone
  • Expert hardware engineers who can push the state of the art into new scales
  • Processes, equipment and raw materials for producing consumer hardware at extraordinary scale, to extremely fine tolerances.

Miniaturization as monopoly

So why is Apple making things thinner, rather than expanding battery life? Why are they sacrificing headphone ports to push their designs into thinner and thinner dimensions?

The answer is that anyone can make bulky tech with massive battery capacity.

But no one can build devices that are as miniaturized as Apple’s.

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Counterfeit AirPods are nearly double the size of real thing.

Through miniaturization, Apple creates products whose subjective experience of niceness cannot be matched. By exclusive control of cutting edge, global-scale manufacturing processes and the silicon necessary to produce both powerful performance and good enough battery life, coupled with an exclusive operating system written to match and enhance the capabilities of the hardware, only Apple can make iPhones.

Which means if you want a phone that feels this nice, you have to pay prices set exclusively by Apple.

Apple is staking its future on its ability to make products that are seamlessly integrated and ever smaller, lighter, and thinner. For now, it’s working. They’re worth a trillion dollars. As manufacturing processes advance and evolve, Apple will have to evolve along with them.