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From a margin induced COGS perspective, Intel would be vendor silicon and the M1.* aren’t. This matters a lot. A lot of the swing of the pendulum in tech to de

From a margin induced COGS perspective, Intel would be vendor silicon and the M1.* aren’t. This matters a lot. A lot of the swing of the pendulum in tech to de-vertical is still was collateral damage from the core competencies excuse in the 90s MBA era to basically chop companies up and make the financials artificially better for a time.

AnthonyMouse 5y ago
> From a margin induced COGS perspective, Intel would be vendor silicon and the M1.* aren’t. This matters a lot. This matters a lot when the vendor lacks competition and therefore has high margins. In a commodity market it's a liability. If five independent vendors each pay money to develop a processor, you get to pick the best one to use. If four independent vendors and you each pay money to develop a processor and yours isn't the best one, oops. > A lot of the swing of the pendulum in tech to de-vertical is still was collateral damage from the core competencies excuse in the 90s MBA era to basically chop companies up and make the financials artificially better for a time. It's quite the opposite. Companies that do one thing and do it well result in more stability. If one of them screws up and falls behind, they fail, but that's as it should be, and the damage is limited to that vertical. Now look at Intel. Their processor designs are fine, their process technology is behind, so they're losing. The same thing happened to AMD -- Global Foundries fell behind -- but because they de-integrated, they could switch to TSMC. Not doing this sooner nearly destroyed the company. Now that they have they're back in the game. The problem with vertical integration is that it requires all of your business units to be the best in the market. Because if any one of them falls behind, it pulls down the whole chain. People like to ignore that when they're winning, but the result is that when you lose, you lose big.

AnthonyMouse 5y ago

> From a margin induced COGS perspective, Intel would be vendor silicon and the M1.* aren’t. This matters a lot. This matters a lot when the vendor lacks competition and therefore has high margins. In a commodity market it's a liability. If five independent vendors each pay money to develop a processor, you get to pick the best one to use. If four independent vendors and you each pay money to develop a processor and yours isn't the best one, oops. > A lot of the swing of the pendulum in tech to de-vertical is still was collateral damage from the core competencies excuse in the 90s MBA era to basically chop companies up and make the financials artificially better for a time. It's quite the opposite. Companies that do one thing and do it well result in more stability. If one of them screws up and falls behind, they fail, but that's as it should be, and the damage is limited to that vertical. Now look at Intel. Their processor designs are fine, their process technology is behind, so they're losing. The same thing happened to AMD -- Global Foundries fell behind -- but because they de-integrated, they could switch to TSMC. Not doing this sooner nearly destroyed the company. Now that they have they're back in the game. The problem with vertical integration is that it requires all of your business units to be the best in the market. Because if any one of them falls behind, it pulls down the whole chain. People like to ignore that when they're winning, but the result is that when you lose, you lose big.