Microsoft, too, is starting to produce hardware with the idea of profiting directly from its sale. While it’s had a lot of success with the Xbox 360, the gaming device typically sells at very low margins relying on software sales and subscription services to generate profit.
Last fall, the company released the Surface to complement the new Windows 8 software. A premium priced tablet with an OS seemingly designed specifically for the product, the Surface is a clear attempt by Microsoft at becoming more Apple-y.
Amazon, for its part, is staying the course selling high-margin razor blades (eBooks) for its low-margin razors (Kindles). But the effect of Apple is still seen in the company as the Kindle evolved from a simple e-ink reader to a full-fledged tablet computer. Amazon has modified the open-source Android OS so heavily that it nearly resembles an OS of its creation.
Buying the best
Each of these companies is trying to become as vertically integrated as Apple. Is it just now that they realize big profits reside in generating an ecosystem that fuels the sale of all of their products? For all the hard work these companies put into their software and services, the hardware makers are seeing most of the benefits.
Only time will tell if the new premium hardware products from Google and Microsoft will pay off, or if Amazon will ever start chasing profits. However, there’s one company that’s already proven it knows how to harness the power of a vertically integrated hardware business model, one that’s capable of hardware innovation, and that’s the company that I want to own.
The article Why Everyone Wants to Be Like Apple originally appeared on Fool.com and is written by Adam Levy.
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