This article feels like talking out loud. Read it twice and I'm not clear what the punch line is.

Some comments here are rehashing the native vs web app debate. I don't see the connection.

Stratechery's aggregation theory the most cogent, prescriptive analysis of one facet of our current business ecology. I don't recall if Ben has made a similar analysis of Apple's integration strategy.

Here's my take...

Apple bringing everything in house continues to surprise, startle, and delight me. It's so contrary to all the business trends, up to maybe the 2010s.

The book Design Rules: The Power of Modularity is an economic model (applying NPV to modularity) describing the divide & conquer strategy of prior juggernauts. GM, "Wintel", etc. I took it as gospel.

And then Apple rejected it. Cite cliche about there being only two ways to make big money: bundling or unbundling.

Tesla has adopted Apple's strategy. Rejecting the automobile manufacturer's conventional wisdom. And I think it'll prove just as successful (if Musk can avoid giving himself an aneurysm. ahem.).

This fully integrated strategy is different from the very successful conglomerate strategy (GE, Samsung, many others). I'm still trying to articulate how. Maybe mostly in focus.

Yes, Apple's integration allows better fit and finish. That's not the part that impresses me.

What most surprises me is that Apple doesn't have to share the benefits (profits, time to market) with any one else. For contrast, during the Wintel ascendency, advances were widely shared across the industry, as evidence by the economic success of clones and peripherals.

My hunch is this explains how and why Apple is able to capture and protect their margins, in a way no one else is able to replicate, because the other strategies don't permit it.

I still really can't phantom what's going on. Surely there are still interfaces, modules, common parts, right? So that Apple doesn't have to reinvent everything from scratch every product cycle. But those design choices are no longer publicly visible, extensible and substitutable by 3rd parties. Witness the whole right to repair debate. (I have another weird theory for Apple's unorthodox strategy around product group management, based just on guesses.)

Tesla is doing the exact same thing for their product category. (Edit: Actually, Tesla eschewing model years, and doing continuous improvements is nearly what I think Apple is doing internally. What we see externally are just snapshots of those products in their continuous evolution and development.)

One possible explanation for Apple's financial success is Wright's Law. It's like the Moore's Law of manufacturing. https://en.wikipedia.org/wiki/Experience_curve_effects h/t Sandy Munro's analysis of Battery Day. I now would love for somebodies to deconstruct a bunch of other apparent juggernauts to see if Wright's Law applies. Or not. AWS's data centers and solar panel manufacturing are two that pop into my mind.

Any way. Back to Ben's article. If Apple has a customer facing differentiator, I think it's mostly their integration that allows them to capture and maintain fantastic margins, plowed back into product development, a virtuous cycle.