“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.
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