Office Hours: Apple’s Dependency on Wireless Carriers, Productivity, and the Buy Now, Pay Later Revolution

Vertical Integration

Apple's strategy of vertical integration has been a key factor in its success, allowing it to control both production and distribution. Scott Galloway highlights how Apple has usurped the luxury positioning once held by HBO in the streaming market, despite some mixed results with its original content like "The Morning Show" and "Ted Lasso" 1. He believes that Apple's control over its ecosystem, from hardware to content, is a significant advantage, noting, "The iPhone is a marvel. It's the most profitable product in the history of mankind" 2. This approach has enabled Apple to maintain high margins and brand equity, making it one of the most profitable companies in history.

   

Market Reliance

Despite Apple's strong vertical integration, its reliance on external internet and telecommunication providers remains a potential vulnerability. Scott Galloway discusses how Apple's products, such as the iPhone and Mac, depend heavily on services provided by companies like AT&T and Verizon 2. He questions whether Apple might consider acquiring capabilities in this space to mitigate these dependencies. However, he acknowledges that such a move might be beyond Apple's current capabilities, stating, "A $1,500 iPhone is no good if the Wi-Fi is shite" 2.