Apple Economics: The cost of integrated strategy

Horace Dediu is a premier blogger/analyst who uses Apple as a lens to understand the strategy in the Mobile space. Somebody whom I can learn a lot from.

His recent posts are on the cost of Apple stores and the cost of running data centres for iCloud, Siri and iTunes. The numbers are big and shows the integrated strategy of Apple that many can’t replicate.

The chart below shows the cost of “fitting” the Apple stores without getting into the lease costs, operations, employees (Apple has 30,000 of them). It comes to about $2 billion in the last 10 years.

 

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He looks into the downpayment into setting up the building for iCloud and other online services. About $750 million. Again, does not include lots of other costs.

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One thing I have learned over many years is the advantage of an integrated strategy over a strategy based only on a specific competency.

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