Essay on Student: Gestation and Apple

How Apple may have turned Samsung into its very own ‘Frankenstein’s monster’

http://bgr.com/2012/12/07/apple-samsung-analysis-outsourcing/

Were Nietzsche alive today and covering the tech industry, he might say something along the lines of, “And what you outsource to the abyss, the abyss outsources also onto you.” Over at Asymco’s blog, James Allworth has written a very interesting piece arguing that Apple (AAPL) really has itself to blame for the rise of smartphone rival Samsung (005930). In fact, Allworth contends that Apple’s reliance on Samsung as a component supplier may have taught the South Korean manufacturer everything it needed to know about effective smartphone design and supply chain management.

Allworth’s argument can be summarized thusly: Apple spent a good part of the last decade thumping its competition because it had gone through “a long gestation period” where it perfected both its products and its business practices in ways that couldn’t have been easily copied by competitors unless they were privy to Apple’s trade secrets. To replicate Apple’s success in this area, it would likely take competitors years of going through similar gestation periods just to catch up.

But Allworth then throws something else into the mix: What if the biggest threat to Apple didn’t come from well-known electronics manufacturers such as Nokia (NOK) and RIM (RIMM), but from the companies it had long relied upon to supply it with components?

“When Apple went through this transformative process, where the design whittled down the broad range

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