One of the challenges of being the 'commodity version' is that a lot of value gets squeezed out of the pipeline.
One way to look at it is that a laptop is made up of a bunch of parts, sometimes those parts come in subassemblies, and every time someone touches a part, a small bit of margin is taken out to pay for that touch. This is the reason that vertically integrated (from chips to finished product) has a higher profit margin, it collects all of those bits into one chunk.
For a long time the windows Laptop market has been all sub-assemblies coming together at the last stage. Not much margin left for the laptop "maker" after they pay for the folks who built the motherboard, the folks who build the disk drive, Intel for making the CPU, Hynix or Samsung for making the memory modules, Sharp or Toshiba for making the display, and then pony up still more cash to Microsoft for an OS.
Apple's advantage is that they tightly control the supply line, using their own OS, and by not licensing their software elsewhere can charge a premium price for additional margin.
By going into competition with their partners, Microsoft took the the only path possible to compete with Apple, be vertical. Interesting to see what that means long term.
How much really is there to "veticalize" ? Microsoft won't build hard-drives, cpu's , memory modules, or display. And i think the big OEM's already design their own motherboards and assemble.
So the only thing MS can save is OEM margin, and it's supposed to be razor thin(maybe 10%) .
One way to look at it is that a laptop is made up of a bunch of parts, sometimes those parts come in subassemblies, and every time someone touches a part, a small bit of margin is taken out to pay for that touch. This is the reason that vertically integrated (from chips to finished product) has a higher profit margin, it collects all of those bits into one chunk.
For a long time the windows Laptop market has been all sub-assemblies coming together at the last stage. Not much margin left for the laptop "maker" after they pay for the folks who built the motherboard, the folks who build the disk drive, Intel for making the CPU, Hynix or Samsung for making the memory modules, Sharp or Toshiba for making the display, and then pony up still more cash to Microsoft for an OS.
Apple's advantage is that they tightly control the supply line, using their own OS, and by not licensing their software elsewhere can charge a premium price for additional margin.
By going into competition with their partners, Microsoft took the the only path possible to compete with Apple, be vertical. Interesting to see what that means long term.