By Ben Rodgers
Editor
SUAMICO – The Howard-Suamico School District timed the market just right and was recently able to upgrade its fleet of nearly 7,800 Apple devices at no additional cost.
Every student and staff member in the district receives an Apple device for educational purposes, and with a high demand for electronics, now was the perfect time to upgrade, Kyle Siech, district director of technology, said.
He said the goal is to be as cost neutral as possible when it comes to technology upgrades.
Thanks to the $2.1 million value of the trade-in, students and staff have the latest technology without costing taxpayers additional money, Siech said.
He said the district opted to end its four-year lease two years early for the upgrade.
“My reaction was first of all excitement, but also shock,” Siech said. “Many of the vendors came with aggressive pricing, but Joe (Lee, director of procurement for Second Life Mac) was able to bring to the table everything I asked for.”
Lee said Second Life Mac, based in Skokie, Illinois, not only helped secure the new equipment but had between 10 and 20 employees working for weeks before last week’s trade-in, making sure students and staff had machines set up and ready for learning.
“We focus primarily on Apple devices, and there are a lot of school districts not using Apple devices,” he said. “One of the unique things with Apple, in general, is the demand for Apple products on the secondary market is much stronger.”
A similar comparison is certain vehicles retain value more than others, so when it’s time to trade in, the seller has a more valuable asset, except now there’s also a much higher demand for that valuable asset.
“In general, Apple devices hold a lot of value as they get older and age,” Lee said. “In addition to the pandemic, there was a high demand for tech across the board. Those two in combination allowed us to be able to put together an offer that was able to be strong enough for Howard-Suamico to upgrade.”
The new Apple devices the district received all have M1 processor chips, which mean longer battery life and faster performance, he said.
Lee said the used computers will be refurbished and sold to consumers on the secondary market.
The pandemic pinch
The Howard-Suamico School District took advantage of a shift in supply and demand, said Angela Hansen-Winker, lead faculty at Northeast Wisconsin Technical College who specializes in supply chain management.
“Last year when nobody really knew what was going on, there was a significant demand in electronics, such as laptops and cellphones, because a lot of the school systems were working from home and also doing virtual school with students,” Hansen-Winker said. “During that time, the automotive industry, such as GM and Ford, felt they didn’t need to place orders for these microchips because of the global pandemic. As a result of that, at the end of the second and third quarter, the automotive industry realized they could still place the orders.”
She said it takes about 26 weeks to produce a microchip, and new vehicles typically have anywhere from two dozen up to 3,000 microchips.
Similar chips are used in electronics, ranging from video game systems to cellphones.
Hansen-Winker said three facilities in the world are efficient at producing these microchips, none of which are located on U.S. soil, and one of the three burned down, which sent demand even higher.
When the automotive industry realized its gaffe, it doubled its microchip order in an already strained market, thus creating the shortage which allowed Howard-Suamico this opportunity, she said.
This type of reaction is called a “bullwhip effect,” because it starts with something small and ripples out to affect more industries, Hansen-Winker said.
She said the same thing happened with toilet paper, when there was a shortage, people would race to the store and try to double their personal inventory.
“When it comes to the pandemic, it’s just impossible to forecast for uncertainty,” Hansen-Winker said. “We haven’t had a global pandemic in many years, and for something like this to occur, companies, and even consumers, were not ready and didn’t know how to react. Typically, what happens is people react in fear, and they start buying more and stocking up more to make sure they’ll be OK or fine with having enough product in their home, or on-hand for a company.”
Just as a person can get top-dollar for a vehicle trade-in as a result of today’s supply and demand situation, she said a school district can do the same with 7,800 Apple devices.
As for a return for supply to meet demand with microchips and the products which use them, Hansen-Winker said it will still take a little more time.
“We’ll probably see this well into March and April before it becomes a little more normal again,” she said.