Apple: crippling competitors with infrastructure

Apple doensn't just out-innovate competitors - it blindsides them, and uses its cash to lock them out.

Ewan Spence has written a fascinating post for Forbes, exploring how Tim Cook has switched from legal action against Samsung to , shutting our competitors from core components – or distracting them by switching the iPhone to 64 bit chips, as it did with the iPhone 5S.

Apple weakened the chipsets in Android by forcing the manufacturers to follow them on the 64-bit roadmap. Resources, time, and developmental energies were directed away from competing directly with Apple and into something that has taken far longer than planned.

That was a clever manipulation of the “speeds and feeds” mindset. These phones don’t need 64 bit processors, but their marketing approach does.

And that’s not the only approach Apple takes. That dirty great cash pile it has? It can shut competitors out. It stopped other phones having fingerprint sensors by buying out the best company making them.

It’s not just this sensor that Apple has control of. Cupertino has made a significant investment in buying up supplies of synthetic sapphire, it hedges DRAM as efficiently as Southwest hedges aviation fuel, it is first in line for touch panels, and even air freight for just-in-time shipping is booked out in advance, forcing competitors shipments onto slower land and sea routes.

For all the talk of Apple’s design innovation, much of the success of the company is down to ruthless competition at an infrastructure level – and that’s Tim Cook’s forte. This may be “boring business” to many – but its crucial to success in fiercely competitive markets.

Photo by Valery Marchive and used under a Creative Commons licence