I know lawyers are not supposed to get jazzed about business strategy articles - but I do.
This article from The Information is fascinating. It highlights the differences between Apple's and Amazon's vertical integration strategy.
Nick Wingfield even worked in an anti-trust thread that will keep my lawyer friends interested.
So what's so interesting here?
We are familiar with Apple's approach. Apple builds it. Apple controls access. Apple customers stay within the Apple force field.
Apple took a step forward in its strategy this month with the unveiling of its M1 chip - the first in-house microprocessor for the MAC.
In the meantime, Amazon is expanding its platform-as-a-service approach. It was reported this past month that Amazon is building an Uber-like platform for finding truckers to move Amazon goods.
These two vertical integration strategies serve to disintermediate the VARs, brokers and other suppliers that eat away at margin - but more importantly, it allows Apple and Amazon to control the environment for its customers from end-to-end.
This is where the lawyers pick up the thread.
Apple's me-me-me strategy seems (intuitively) anti-competitive (even if its not).
Whereas Amazon's approach of playing nice with all comers seems (intuitively) more fair (but is it?).
Amazon replaces the "honest" broker in its model, which leads to questions about whether it can play both player and referee and play fair.
A lot of these anti-trust questions are playing out in Europe. But, I would expect that a Biden-led DOJ will be taking a close look at these somewhat novel anti-trust questions. . . among many others.
So, stay tuned. . .whether on AppleTV or on the Amazon FireTVStick.
Still, Amazon’s approach to vertical integration could invite great regulatory risk for the company over time. By opening so many of its expansion businesses to outside participants, it is likely to face accusations again and again that it can’t fairly play the role of both player and referee