Apple Sees Sustainable Advantage from Silicon

Tim Cook, CEO of Apple, sees his company's expertise in semiconductors as a source of sustainable advantage. "Now, we’re well beyond just the surface level of design of hardware and software," he told Bloomberg Businessweek. "We’re deep in the guts. This week you saw the A7. You saw our new M chip. Well, these are only possible because many years ago we elected to start building our own silicon team, and now we have many, many people designing silicon.

"And you saw us go to 64-bit. Well, why are we able to do that first? It’s because we’re at that level of being vertical. Does anybody—do these other three companies* have silicon expertise? You can answer that. Maybe they have something that I’m not aware of, but in terms of the depth of it …

"So it will be interesting in the next round, the next wave, to see what happens there. What do people do? When we looked at it, we concluded we needed to do our own stuff because we were dreaming of products that couldn’t be done with silicon that you could go buy. So we designed our own and built an incredible team." source: Bloomberg Businessweek article

*He appears to be referring to Google, Microsoft and Nokia or BlackBerry.