“Anyone who says that a particular company has all 7 Powers (of Hamilton Helmer fame) is full of it.”
“Apple has all 7 Powers.”
“No they don’t.”
“Go on, have a think.”
“I … Well they don’t have network eff- … or cornered res- … but they can’t possibly … god dammit.”
Conversation
I mean seriously.
Scale economies — iPhones and chips
Network effects — App Store and iMessage
Cornered resource — their chip design team
Switching costs — duh
Branding — duh
Process Power — their JIT manufacturing process
Counter Positioning — I guess their in-house content?
3
12
Replying to
I sort of don't believe their chip design team is a cornered resource. From chatting with friends in the industry, lots of other teams, *given that brief*, could have come up with something similar
1
1
Replying to
Interesting. My understanding is that they got the folk who did Celeron early on, and then they’ve been working together towards this for 10 years. Hard to replicate this sort of bond + tacit knowledge.
I don’t know this space well, though, so I’d defer to your friends.
1
1
Replying to
I'm sure it's an excellent team—there are lots of other teams in the industry with a similar sort of bond though. A friend was like, "I spent a while trying to figure out why we never did this, and we definitely could have, but the economics never would have made sense for us."
1
1
Which is a combination of vertical integration—Apple put all the $ that would have gone to Intel's profit markup into chip design—and the punishingly low commodity profit margins of non-Apple hardware in general.
1
1
What Apple *has* got cornered is all of TSMC's top-of-the-line process node capacity for the foreseeable future.
1
3
Replying to
Oh wow, that’s a good one. I’m updating my opinion; thanks for this.