Tim Bajarin: Google will use Motorola Mobility to become vertically integrated

“If you look closely at the most successful company in tech today, it is Apple,” Tim Bajarin writes for TechPinions. “And they are in this position for a major reason. They are completely vertically integrated. They own the OS, the hardware and the ecosystem. And although they don’t manufacture their own chips, the IP in their chips is homegrown and designed to meet the needs of their advancements in OS and hardware designs. The result of this vertical integration is that they have complete control of their future.”

“Another company that is pretty much vertically integrated is Samsung. They do their own design, their own chips, and in their case they even do their own screens and manufacture their own products. Their only week link is with the OS since they are licensing Android for their smartphones and tablets,” Bajarin writes. “However, they are about to launch their own cloud services and take even more control of their destiny by tying all of their products together to cloud based applications and servers. And as you know, they have gained great ground in smartphones and while still struggling against Apple in tablets, they have become more aggressive in looking at alternative operating systems to Android and could soon deemphasize their use of Android in favor of their own OS solution to guarantee even tighter vertical integration in the future.”

Bajarin writes, “But there are two companies today that at the moment have very little control of their future because of their lack of vertical integration and that is Google and Microsoft. And without out being vertically integrated, their prospects of wide spread success in the future in my viewpoint is highly questionable.”

Read more in the full article here.

MacDailyNews Take: Apple was right all along. Vertical integration is superior to horizontal.

Those who complain the loudest that Apple is “closed” are the very ones trying the hardest to emulate Apple. When you hear the Apple wannabes bleat, what they’re really complaining about is that they can’t match Apple’s level of vertical integration.

Related articles:
Why Google’s purchase of Motorola Mobility is a white flag of surrender, and how Apple won the future of tech – August 15, 2011
Why Apple’s controlling nature is a core asset, not a flaw – May 6, 2010
J.P. Morgan analyst prefers ‘vertically integrated’ approach like Apple’s in smartphone market – March 26, 2010
Apple’s vertically integrated Mac could make interim Wintel model look like a detour – April 25, 2008
Apple has proven that vertical integration works better – October 24, 2006
Microsoft tries to match Apple’s vertical approach – October 11, 2006
Apple was right all along: vertical market quality trumps horizontal market woes – April 30, 2006

21 Comments

  1. No, vertically integrated companies are better if only they have really talented people on the top who know what they are doing.

    If you keep just any Nokia or RIM top manager and miraculously make those companies vertically integrated, this will not work.

    As to Google, they are not going to be vertically integrated. This Bajarin guy just fantasises.

  2. Vertical integration offers certain advantages to successful companies like Apple.

    But becoming vertically integrated is not a road to success for foundering companies. Look at RIM.

  3. CitizenX has the correct take…

    Apple has been working on their integration from day 1. Steve got it, and as the reality of the dream got closer through technology, Apple would continuously refine and define what could be and is possible with their products.

    They kept the course, never altering it. Then one day Apple wins. Now everyone thinks they can do it like apple.

    I don’t think that’s gonna happen anytime soon

    -t

    1. Well said thomas and you were correct to acknowledge X because regardless of what the tech sector does in the wake of Apple’s success they’ll be playing in a huge shadow.

      Vertical integration is a double-edged sword and things can get dicey with major changes in leadership. But let’s be clear, the brand has become the empire which means all products with end-of-life roadmaps in sight are subject to packaged deals and spin offs, meaning there’s still revenue and hope, but Apple doesn’t need it.

      I see the Mac Pro fast becoming a dinosaur simply because it’s a monster, a relic of industry, a powerhouse in an age of mobility that serves a market Apple clearly no longer understands and each new product release createa more controversy than the last release.

      I believe Apple will spin off the Macintosh division, like they’ve done with every team whose product has fallen from grace; they don’t abandon, they repurpose. How many new products coming from Apple are just a long continuation of an on-going retrofit of tech advancements as they become available?

      I predict the Mac Pro will resurface as the Cube Redux. Regardless of our desire to be mobile in the world, we’re not nomads and we all want a place to call home, and we’ll have our monsters on a leash.

      I think we’ll soon see evidence of a new roadmap for the Mac and Phil Shiller will be creaming his pants trying to contain himself as we are tickled to death with rolling disclosure over the next few years.

      The Mac I envision is still five-years out, but I believe Apple will give new life to the meaning of luggable. This new Mac will be modular, beginning with the base platform or dock, and the modules will be layered containers or stacks in the shape of a cube. The Cube would continue to operate even after lifted from its base and would be the homes server that links to iCloud and our idevices.

  4. Vertically integrated corporations were long the hallmark of American Capitalism. Nothing new or insightful here. For many years vertical integration was considered to be not Best Practices. It has found favor lately in the tech sector.

    1. …But, you can’t have 10 successful vertically integrated smartphone companies.

      I doubt more than 3 will survive, and maybe only 2 that are vertically integrated companies.

      1. That’s so true in the world; we really don’t want choice, and sometimes either or can be too much for some people.

        Pepsi or Coke is fine. We don’t need RC, or Pepper, or Shasta, Cragmont, or any of those other brown drinks they sell by the billions!

        1. We do want choice and get it.

          To be vertically integrated in a super complex hardware software connected product is totally different than a soft drink market.

          Apple took decades to build up the expertise in hardware, software, coding systems, and management.

          I do not think Google can instantly become efficient. If Moto was super efficient, I don’t think they would have been sold off. Combining them doesn’t automatically make efficiency as seen in so many companies.

  5. “Another company that is pretty much vertically integrated is Samsung. They do their own design, …”

    Yeah, if by ‘design’ you mean the why I got the quote: Copy & Paste.

  6. If they do this, they mess-up their relationships with other Android OEM’s. (Maybe they already did that already.) Also, Nokia is the preferred WP7 partner.

    So, the lesson is: Build your own OS before your provider pulls the rug out from under you.

    1. Hard lesson for Google’s partners for sure, but they’re used to getting fscked without so much as a reach around by Microsoft, so if Google gets a handful, it’s still better than Extinguished, which is what Nokia can expect. Their name is destined for the dustbin of time along with the rest of the phone companies of 20th century.

  7. “Another company that is pretty much vertically integrated is Samsung. They do their own design…………..”
    ————————————————————————–
    LOL

  8. Their only week link is with the OS since they are licensing Android for their smartphones and tablets,” Bajarin writes.

    Also, licensing an OS, as opposed to developing your own, can be perceived as a “weak” link and more importantly, after years of licensing someone else’s “brains” for all your products only to realize the potential to suddenly become “smarter” using a native software upgrade, is impossible.

    So, only when Samsung releases its first product running a Samsung operating system will it finally be considered vertically integrated, Technically speaking, of course.

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.