📱 Tech’s Counterintuitive Economies of Scale 🔨

Why an iPhone can cost less than a backyard shed

Maybe I’m easily impressed, but every once in a while, I can’t help but think about the disparity between incredibly sophisticated tech products and much less complex other products/labor.

I can buy an iPhone for around a thousand bucks. It’s the product of thousands and thousands of highly skilled people around the world working together at the cutting edge.

Think of the whole supply chain. 🌐

ASML engineers in the Netherlands are doing black magic stuff to make sure that TSMC in Taiwan can make chips with features measured in single nanometers…

Various companies in South Korea and Japan are building complex parts like memory chips, high-resolution high-dynamic range OLED screens, antennas that can transmit gigabits/sec over the air using incredibly complex physics tricks, multiple cameras that all fit in an area the size of a postage stamp yet take better photos than cameras that weighed multiple pounds not long ago.

There are armies of people assembling all these parts together along the way. What an incredible coordination problem to make all this synch up! One tiny part is missing and you can’t make the final product. 🔩

Then you have the designers, engineers, and UX people creating the thing in the first place, going through iterations and prototyping for the physical objects, the custom silicon, and armies of software engineers who write, test, and maintain millions of lines of code for the operating system, the apps that come with the thing, and then manage a platform of 3rd party apps that use frameworks and APIs that also need to be written and maintained.

Additionally, security people need to make sure that all this is hardened against attacks from script kiddies, criminals, and nation states.

All these people can work for me — get parts manufactured, shipped around the world, assembled, and then shipped to me — for about a thousand bucks.

But if I want to hire one guy to go buy some wooden planks and build a small shed in my backyard, it’ll cost multiple thousands of dollars. 🪚

¯\_(ツ)_/¯

That’s not my shed, but I liked the dogs.

🧭 This first appeared in Edition 369 of Liberty’s Highlights. New here? I made a page for that: Start Here.