Microsoft and Google Disrupt PC Industry Ecosystem; Adopt Apple-Style Vertical Integration With Surface and Nexus 7

PC Mag’s Tim Bajarin says that by becoming hardware vendors, Microsoft and Google have forever shifted the dynamic of the PC industry, disrupting a pattern of 30 years wirh operated around a basic dynamic: Microsoft creating and licenscing an operating system (DOS and then Windows) to PC vendor OEMs who manufactured the hardware to run it.

However, Bajarin says that with Microsoft having jumped into the hardware business with its new Surface tablet, the PC universe has shaken up overnight with Microsoft for the first time competing directly with its OEM customers and encroaching on their turf.

Adding to the paradigm-shift, Google joined Microsoft by introducing its Nexus 7 tablet (albeit designed and manufactures by OEM partner Asustek), likewise unilaterally expanding its role as a hardware vendor competing with its own customers.

In effect, these developments indicate that both Microsoft and Google have acknowledged the superiority of Apple’s vertical integration model in which the vendor owns the hardware, software, and service as the most effective model for creating products for consumers, Bajarin observes.

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