It makes sense that Peloton foresees many, many years of sales without needing to update their hardware much.
PS - 2020 was their best year ever and 2021 could be even better. People are currently willing to pay American rates to avoid supply chain risk.
PPS - Ohio is a great location for Peloton. I bet they can get 70-80% of their product by value from supply manufacturers just within the state. Expand to Michigan and Indiana and you might be at 85 or 90%. This is in the Toledo metro area which already has a large auto manufacturing supply chain, as well as PV panel production. They’ve got plenty of workers and suppliers to draw from.
It makes sense, and also having enough diversity of locations to avoid infrastructure outages.
Very clever.
https://www.weather.gov/iln/climate_graphs_cmh#
Got to 90 deg today.
When the product is consistent, you can get competitive pretty much everywhere. That's a luxury you will never have unless you are already a big MNC.
On paper, US manufacturing been cheaper than in China for quite a few years already, but you have to spell that "ON PAPER" with big bold letters.
1. Labour — flyover states had wages comparable to South China for 2-3 years.
2. Education — supposedly best in the world, supposedly, at least beating Chinese public secondary school
3. Supreme "intellectual" property regime — no comparison to China at all, you can sue whomever, whenever, for whatever, and barristers here are even calling you themselves to offer their services to sue your competitors
4. Supply chain — world's biggest companies are there, if they are all here, there must be at least something they all buy.
5. Taxes — US vs. China's tax rate are incomparable: 30% vs 60%-70% something depending on incalculable amount of fees, charges, levies
How things are in reality:
1. People in US you can hire cheaper than highschoolers in China are really not-employable, in other words people with problems.
2. Education is there, but only for people who can already dish out a sum, otherwise even a passable secondary education is not a given.
3. Yes, you can sue everybody, and the same applies in reverse too!
4. Those companies really do buy, and sell a lot of stuff, just not from you, but the same guy you buy your stuff in China
5. US taxes are half that of China, but Chinese accountants know how to run from taxes 10 times better than American accountants.
There was a part we looked at, comparable came from the Nintendo Wii.
This part came from this little hackey shop in Shenzhen.
Essentially found out this 'world class product' had some very specialized parts made by tiny shops in China. That kind of adaptability is not quite in the USA.
Tool and Die as well.
But it could be I think if there were more demand for it.
Lots of analogs to great programmers in terms of when to optimize what, and how. Manufacturing process selection, optimal batch size, make vs buy, accounting for supply chain uncertainty, profitability analysis, etc.
Once you have production offshore it is even harder. They may have made a few jigs (not as many as labor is cheap enough to not need them), but and odds are even in the worst case they can re-use all but one of those jigs. Thus once you are offshore it is better to let offshore do the prototype work.
It gets far more complex than that.
Brains, even tiniest amounts of them, are.
Read my story above how my first line worker in Canada whom I found to not screw up a completely banal assembly was a 60k+ MEng.
At scale, there are also complications, like the cost of training, labor laws, or approving role changes with the union.