[jessekv]

Your reply comes right out of ECON 101, and is broadly speaking correct. Still, you've missed the point.

Let's use your example, Microsoft. Companies have different incentives than communities or countries, but I think we can make this work.

For many years, Microsoft only sold software, and let others who were experts in hardware make the hardware and install microsoft on it. Later, they realised that it was strategically important to manufacture their own consumer hardware, and now you have the Surface lineup. Maybe in the near future, they will decide they need to start manufacturing their own chips. If they do that, it's not going to be cheap, especially in the short term. In fact, Microsoft might never be able to produce chips more cheaply than Intel. But they still could choose to do it in-house (or just buy Intel) if the alternative is to lose their dominant position in the market.

[wolverine876]

> Your reply comes right out of ECON 101

What a bizarre things to say. First of all, are you an economist who can comment on other people's sophistication? Second, who cares? The merits are what matters, and you agree it's "broady speaking, correct".