Apple is a hardware company

Firstly, I would like to be recognized for being the last person on the planet to state that "Apple is a hardware company." I realize all 6 or 7 billion of you have already labeled the company as such.

Secondly, I wonder if we do not realize how fundamental this idea is to Apple and for Apple.

Earlier, I wrote that I think for all his great charts, Asymco misunderstands Apple by labelling them as a (very large/profitable) "start-up":

And this is the Apple story -- and the Steve Jobs story -- that I believe is almost always overlooked. There's this persistent notion that Jobs used his magic touch and suddenly we had something new and revolutionary and amazing -- and magical.

This diminishes the long, hard work of Jobs, his executive team and Apple staffers. 

A good part of why the iPad dominates the tablet market is because the company has done the hard work of optimizing their supply chain. 

Apple spent years developing iTunes, its payments platform, recommendations platform, distribution platform. This begat App Store (and Mac Store). All of which took years of hard work.

The company spent years learning how best to integrate hardware and software. They learned first-hand what truly mattered -- seemingly 'minor' issues like battery life -- and what did not, such as "an open platform". Or, Flash. 

I view Apple as exactly the opposite of a start-up.

Pithy, no?

Unfortunately, reader Delmiller asks: well, Brian, if you're so smart, than what is Apple?

My immediate thought was:

Apple is what HP should have been -- had they not hired Carly nor become addicted to printer ink revenues.

Which is when the reality of "Apple is a hardware company" hit me. 

Is Google a hardware company? The EU just approved their acquisition of Motorola. Perhaps they are or will become one. Same with HP. Same with Dell.

Microsoft wants to be a hardware company as they realize the benefits of controlling the entire ecosystem (Xbox) or as much of it as they can (Windows Phone). The fundamental difference between Apple and all these other companies arises, however, not when we judge Apple by how good they may be at hardware or how innovative or efficient.

The difference arises when we understand that Apple makes nearly all its money from hardware.

Google makes their cash from advertising. This will be so even if they become a wildly successful hardware company offering music players, TV sets and smartphones, for example.

Microsoft will continue to make the vast majority of their money from software no matter how well Windows Phone does in the coming years.

Yes, Apple uses software and applications and services -- and an integrated ecosystem -- to support hardware sales (and margins) but I believe a core lesson of Steve Jobs is not simply that Apple be a hardware company. Rather, that Apple be a hardware company that *never* strays from this.

They will *never* build a service or application (or acquire a company or content) that even tempts them to place software (or some othe business or business model) above hardware.

Apple is a hardware company. The very hard work of design and development and testing and building and distributing and retail are testament to this. And unlike all the other companies that started off in hardware or are now venturing into hardware, Apple will not allow themselves to deviate.

Even if Google, say, somehow manages to earn enough off advertising to give away smartphones -- and service -- Apple will not alter its course. They will continue to build things. Great things, hopefully, but never will those things support software or other business lines. Ever. I am sure that deep inside Apple there are tablets with the teachings of Jobs etched on them. One such teaching, no doubt is: there is no business model, only hardware.

All of which, I know, seems obvious. But I don't think people graps how deeply embedded this notion is at Apple.