(1) Apple’s iPad may be latest and greatest tech gadget，but oddly enough，it also represents a return to a model that most tech companies long ago abandoned — vertical integration.
Apple has designed its own processor, called A4, to power the iPad. (2) That’s a big deal so until now Apple has used chips made by others，like Intel and Samsung. (3 ) In addition the processor, Apple also makes its own operating-system software for the iPad.
(4) Moreover，the only way to get apps for an iPad will be to buy it from Apple. The s
Is that a good thing? (7) Vertical integration was the norm back in the 1970s with minicomputer manufacturers like Digital Equipment Corp, and Data General, and late on with workstation makers like Sun Microsystems. (8) But pretty much everyone in tech decided long ago that vertical integration was a workable model. Why make your own processors and operating system when you can buy chips from Intel and Windows from Microsoft? (9) It was ironic which on the same day which Apple was announcing the iPad, Sun was holding an event to announce the completion of its takeover by Oracle —ironic because Sun’s pricey vertical -integration model was a big reason for the company’s decline.
(10) Why is Apple defying the conventional wise and going vertical? For one thing, its CEO, Steve Jobs, is a control freak and hates relying on others. (11) Also，Jobs has been around long enough to remember the advantages of a vertical integrated company. (12) If the A4 is as good a processor as people seem to think, Apple’s iPad will have a big performance advantage than all the other tablet computers that are about to hit the market.
And what of Apple’s risky bet on vertical integration? (13) Won’t the highly cost of going it alone put Apple at a disadvantage compared to makers that buy chips and software from others? (14) Won’t those other guys be able to charge more than Apple? The answer is, probably yes. But again, most people, myself included, are happy to pay more for what Apple makes. (15) My take is that Apple’s bet on vertical integration，that seems anachronistic，is actually a stroke of genius.
