Apple locks its rivals out of tablet market with exclusive sourcing deals – TNW Apple

Apple has used its massive cash reserves and manufacturing investment to block other manufacturers from sourcing the best parts for their devices, creating frustration in its rivals like HP and widening the gap between the iPad and its competition, a source with knowledge of the matter has informed The Next Web.

Amid these proceedings, there has also been a lot of speculation around why Apple’s iPad hardware is so much better than the HP TouchPad’s but now a source close to the matter has given The Next Web details on exactly how much power Apple exerts in tablet hardware and software.

For one, Apple has exclusive deals with hardware manufacturers for the best parts. This means that HP couldn’t get the same display as the iPad, it could only source the second best. It’s not that HP didn’t want to get the best, or wouldn’t pay for it, it simply was not available to them, period. If HP wanted display technology for production units that rivaled the iPads, it would have to wait until Apple’s exclusivity deals on hardware ran out.

Inside HP, this process is looked at as a way that Apple blocks not just access, but innovation. While there is respect for Apple’s design and engineering prowess, this exclusive access to technology is seen as holding back the innovation of companies like HP by denying them access to the tech that they need in order to make their products competitive.

What I don’t agree with is the sentiment that Apple is ‘blocking innovation’ with its tactics. When companies find it hard to source the same parts as Apple, in the same quality, they are feeling the bite of a decade’s worth of hard work and forward-looking strategy, not some sort of technology trump card.

Yes, Apple has exclusive access to the absolute best touch panels and crazy good machining technology for aluminum casings, but not because it was won in some sort of rigged contest. It has access because it built that access by hand, by looking to the future while everyone else was looking to the past.

via Apple locks its rivals out of tablet market with exclusive sourcing deals – TNW Apple.

Apple’s success will be on the business history book. Two points: First, Apple’s exclusive strategy cannot last for ever, perhaps fading gradually after Jobs dies. Second, others were all wrong to blame Apple for their own failure of innovation! A textbook example of self serving in the bad direction~!

This entry was posted in Teaching cases. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s