News, info, and opinion by Mac users, for Mac users.

April 30, 2006

business

Vertical advantage

Posted Apr. 30, ’06, 10:06 AM PT by Dan Moren
Category | Business

Steve Jobs and Scott McNealyOne of the factors that Mac aficionados often tout as a benefit of their chosen platform is the vertical integration Apple has achieved by controlling the whole process, from soup to nuts. In some ways, it’s a double-edge sword, as it has also become a common target for anti-Apple forces who prize choice above all else, even to the point of those who use solutions that work worse to avoid the dreaded bandersnatch of “lock-in.”

One of the few other companies that exemplifies the vertical market in the technology field is Sun. In recent years, they’ve had trouble finding their niche, culminating recently in Sun CEO Scott McNealy (pictured at right with Steve Jobs) stepping down from his post.

In the context of that shift, software architect and engineer Brandon Werner has penned some thoughts on the nature of the vertical market. Primarily, he takes issue with the suggestions that products from “horizontal” market providers (i.e. Dell, Gateway, Creative) have a lower cost than from their vertical competitors (such as Apple).

Participating in Vertical Markets does tend to be more expensive up front, but the cost isn’t non-existent in the Horizontal model, it’s just more hidden. Perhaps to an America where most people live paycheck to paycheck, a cheap Creative player now may mean you can afford to pay the integration cost in the future the next time you get paid (another cable, another music service, customer support calls, syncing issues, rebuilding the library, upgrading to Vista for that “extra” media ability, ect.) but in the end, you’ll still end up paying just as much, especially if you value your time.

(emphasis added)

I think Brandon’s spot on with his last point there: Americans do value their time, but I don’t believe they always consciously think about that factor. Then again, think about the number of late night infomercials that boast time-saving devices (they chop, they slice, they make julienne fries!).

Then again, our preoccupation with money is probably even more prevalent.


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