>Apple's most underestimated strength is their continued march towards vertical integration
... maybe ... Markets swing back and forth between integration and disintegration. Apple was very vertically integrated in 1995 and paid a heavy price for that when the PC market exploded into a million models with multiple operating systems at low prices. Integration is usually best when innovation is lowest since value chain segments are mature and cost reducing and you can integrate the value chain, squeeze out waste between segments, increase coordination between segments and capture a nice profit. Innovation all throughout the value chain is very high right now, so this does not seem like the time to vertically integrating.
An interesting aspect of the RIM versus Apple thing is that they are both pursuing integration strategies, but RIM seems to have focused on integrating the wrong things for 2008 and then had an deeply integrated ball-and-chain around their leg just at the moment they had to be nimble. Apple seems to be in a similar spot w.r.t. Android: using the iOS UI is terribly frustrating after using Android 2.2 for a while (no back button?!); Apple's terrifically integrated, dogmatic approach leaves them little room to respond to competitors.
They're integration is still pretty limited... they're just much more integrated than their competitors. They still outsource all manufacturing and fabrication, battery tech, display tech, and storage tech. They're just integrating enclosure design, chip design, OS design, media sales, and carrier sales. Of those 4, Google and MS only do OS design. RIM does OS, enclosure and carrier sales.
Importantly, Apple is very easily able to disintegrate when needed. They're doing their own chip design now, but if someone comes out with an off the shelf chip design that's better than the A4, there's nothing stopping them from building it.
Your point makes sense in theory, but I don't think it applies here.
... maybe ... Markets swing back and forth between integration and disintegration. Apple was very vertically integrated in 1995 and paid a heavy price for that when the PC market exploded into a million models with multiple operating systems at low prices. Integration is usually best when innovation is lowest since value chain segments are mature and cost reducing and you can integrate the value chain, squeeze out waste between segments, increase coordination between segments and capture a nice profit. Innovation all throughout the value chain is very high right now, so this does not seem like the time to vertically integrating.
An interesting aspect of the RIM versus Apple thing is that they are both pursuing integration strategies, but RIM seems to have focused on integrating the wrong things for 2008 and then had an deeply integrated ball-and-chain around their leg just at the moment they had to be nimble. Apple seems to be in a similar spot w.r.t. Android: using the iOS UI is terribly frustrating after using Android 2.2 for a while (no back button?!); Apple's terrifically integrated, dogmatic approach leaves them little room to respond to competitors.