I came to the realization that I couldn’t think of an example of when vertical integration isn’t just an older name for enshittification. Apple owning an app store, Amazon being a marketplace and seller, etc. What examples of vertical integration aren’t bad? Are there any?
I would argue that Amazon selling and also handling significant parts of the logistics is beneficial to the customer.
Shipping companies did not do a good job, that’s why Amazon vertically integrated parts of it.
Netflix having its own fiber and datacenters is another example where it was likely beneficial.
These companies do other things that suck, but I’m not sure I would blame the vertical integration on much of it.
It’s interesting you mention Apple because their products benefit tremendously from vertical integration in ways that directly benefit the consumer.
We can argue all day about price, but as far as features, the interconnectedness of Apple stuff is way better than anyone else. The ability to seamlessly jump from your laptop to your phone to your TV and smart speaker and have it all routed to your account means that you only have to manage that one account.
Again, there are more consumer-friendly ways of doing this and Apple isn’t a saint, but there are recognizable benefits that come along with it.
That’s not really vertical integration, though. That’s more horizontal than anything.
Vertical integration would be, for example, Tyson chicken owning the company that makes the feed for the company they also own that raises the chickens that go to their own processing plants.
It’s a supply chain structure, not a product offering ecosystem.
Their horizontal integration is made more seamless by the vertical integration.
On an Apple laptop, they’re the OEM of the hardware product itself, while also being the manufacturer of the CPU and GPU and the operating system. For most other laptops that’s 3 or 4 distinct companies.
