[AlbertCory]

A good article.

> This level of investment simply isn’t viable for a company like Snap or Twitter or any of the other also-rans in digital advertising (even beyond the fact that Snap relies on cloud providers instead of its own data centers)

Let's change the industry to autos: "Funbag Autos has a massive investment in aluminum companies. This level of investment simply isn’t viable for a company like Tesla ... (even beyond the fact that Tesla relies on outside aluminum companies instead of its own"

In other words: "vertical integration is good." It can also weigh you down and keep you from advancing your technology.

As for Metaverse: he admits it's a loser, but maybe not that terrible in the grand scheme of things.

[scarface74]

> In other words: "vertical integration is good." It can also weigh you down and keep you from advancing your technology.

Counterexample: Apple.

[AlbertCory]

It's not a "counterexample" because I didn't give an example.

In any case, it's never a simple answer: vertical integration has advantages and disadvantages.

[apetresc]

> It's not a "counterexample" because I didn't give an example.

A counterexample is not a counter to an example. It is an example that counters a point, which you did give.

(That said, Apple is still not really a counterexample because clearly vertical integration can weigh you down even if others have pulled it off successfully)

[tokai]

A counterexample is not a counter to an example given, but an example that counters or refutes what has been stated.

[bee_rider]

It seems impossible that a single example could counter a statement that is basically "it is good but also has some downsides."

[tokai]

I'm just correcting AlbertCory's wrong understanding of the word counterexample. I don't care for their discussion.

[AlbertCory]

One pedantipoint for you.

[tejohnso]

> vertical integration has advantages and disadvantages.

Which Jobs acknowledged in his 1997 WWDC talk before becoming CEO (again).

There's an execution burden with integration and it has to be overcome with solid execution.

[AlbertCory]

It isn't just "execution" -- it's choosing what you ought to build in house now, and what's better to just buy.

Building the processor in house probably IS a good call. In Jobs' day, even he didn't build the processor. But nowadays, things are different.

[scarface74]

Apple started acquiring companies with chip design expertise while Jobs was the CTO. The first processor that had some custom design by Apple was the A4 which was used in the 2010 first generation iPad and iPhone 4.

I can’t believe that Apple wasn’t working on the first 64 bit in house ARM chip by the time SJ resigned in 2011 that was introduced with the 5s in 2013.

[skrtskrt]

a company succeeding with it is not a counterexample to a statement saying basically it can be advantageous but it’s hard to do well

[AlbertCory]

Correct. Apple also picks and chooses which things it buys and which it builds in-house.

[naravara]

Apple has clearly had difficulties scaling its company to maintain this sort of integration though. They're not bad enough to materially harm it, but you can see the seams. Nothing hides problems like success so I suspect, if Apple does start to founder in the next decade, we'll look back and blame the nest of internal dependencies they have leading them to fall behind peers using off-the-shelf parts.

[AlbertCory]

Like I said: tough tradeoffs.

Maybe now you can't easily access a ginormous cloud of AI-optimized processors (I don't actually know this is true, by the way. Anyone?).

A few years from now, maybe some large player will offer that, and Facebook / Google will be stuck with these big investments while their little competitors just pay for what they use.

I'm not taking a position one way or the other; just saying that it's always a hard call.

[scarface74]

The major cloud providers already offer instances with GPUs. Google is one of the three.

And before anyone says that AWS was an offshoot of Amazon Retails excess capacity, this is an urban myth. AWS was always a separate product with separate servers just for selling to customers.

[scarface74]

I see just the opposite. The Mac was the last outlier in Apple’s integration. From the software side, Swift UI is bringing all of their software development together.