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Akvod on 28 May 2011
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demonfox13 said:
Akvod said:

I think you guys are confusing how "investment" is being used... they're obviously reffering to not utilizing vertical integration...

This doesn't mean they aren't going to be doing a lot of R&D.



Not necessarily, they can still stick by vertical integration while keeping the cost low. The advantage of vertical integration is that there is almost no holdup which in the end does prove more cost effective as time is money. Now if they were going to incorporate another aspect within the already vertically integrated process in the supply chain we have the problem of increased cost. Although it's my speculation, I believe they would probably either A) upgrade their Cell technology and try to perfect it a bit more, or B) go with a closer architecture to the PS2 which developers are familiar with. Actually developers are familiar with either by now and the cost of the dev kits have gone down substantially. Besides Apple is the prime example of a vertically integrated company with their ipads and iphones as far as software and hardware (not sure on the ipod though), this all because it financially makes sense as long as you have a large enough market.

http://www.nytimes.com/2011/05/27/business/global/27sony.html?scp=2&sq=howard stringer&st=cse

http://en.wikipedia.org/wiki/Theory_of_the_firm#Transaction_cost_theory

Apple is NOT the prime example of vertical integration.

 

Bad ass pic of Stringer BTW: