David Rosenthal: belief

Transcript context

…Tech themes. You know, I don’t know if this was apparent to them at the time but when you look at the proliferation of applications that Apple has been able to go into with first party hardware that they never would have dreamed of 10 years ago, it’s incredible and it’s all powered by the work that they did on the A series chips. So, we look at the Apple Watch which has the S2 chip which is they call it the system in a package, so not just the system on a chip but they actually package other sensors with it. The ear pods have custom silicon, the W1 chip. The touch bar has the T1 which basically is a forked version of watch OS that it runs and it’s a similar architecture. It’s incredible that Apple has been able to so finely tune their products because they’ve been able to control the underlying chip and surrounding pieces of that rather than buying it from a third party. And Apple we view as a vertically integrated company, and really, they’re modular in so many ways. They have tons of suppliers. They negotiate fiercely. They combine hundreds of other companies’ products into their own and then put a nice case on it. But for the things that they think can really differentiate them and really provide a strategic advantage for the long term, they bring it in-house. And doing that with the silicon and vertically integrating the silicon into all their products really enabled all these new product categories that they’re trying to go after today. And I don’t think any of them will be as successful or profitable as the iPhone. I think that was a unique moment in history but it sure is allowing to go new places. This was one of mine too that talked about sort of this idea that if you care about software, you make your own hardware, the Alan Kay concept. But I wanted to talk about it in the lens of there’s very, very few technology companies that really take that to heart and they tend to be the giant, most successful, enduring companies that do. Google with what they’re doing with their data centers and slightly one level of the stack with tensor flow and all the machine learning tools and technology they’re creating. Amazon, certainly with Amazon Web Services. I think that balance, if you really want to build an enormous and sustaining technology franchise, certainly Microsoft does this too, and Facebook is beginning too, you have to make that transition. But you can’t do that as a startup, right? It would be a fool’s errand, you know. Xiaomi tried.…

Stored transcript either side of the excerpt. The highlighted words are the published quote; the surrounding text is unedited source, never generated.