Vertical integration has been a no-no. The advantages of specialization (sticking to one’s knitting) have been emphasized. And now, Microsoft moves into hardware. That, in turn, has limited their ability to take the kinds of risks on hardware innovation that have helped define the iPad. Furthermore, with the iPad, Apple has proved that there are significant advantages to designing hardware and software together.
The New Zealand incumbent telco has separated itself into infrastructure and access companies, according to Telecom TV. This week it was announced that the incumbent telco will demerge so that Chorus, the firm’s fixed-line infrastructure arm, would be able to participate as an independent entity in the upcoming award of government contracts for the building of a national broadband network. It’s believed that this is the first time that an incumbent has undertaken complete separation. The new structure should mean that New Zealand avoids the ‘incumbent problem’ Australia suffered when full-scale war broke out between Telstra and the government around the role of the still vertically-integrated incumbent in the development of that country’s NBN. Shareholder approval for the complete services/infrastructure split in New Zealand was gained this week.