Today, I simply want to share a fantastic video on how we are transitioning from Software eats the world to Hardware eats software – that ate the world. It points out how hardware is the new central battlefield for "digital" platforms and why, in that regard, Apple has been building a tremendous competitive advantage.
The second part of the video might become a tad technical, but the first part is really about this key shift that we'll discuss soon in the newsletter:
The battlefield we are talking about is the OS and Rails bottom layer of "what is digital":
And don't just think it's about consumer electronics and social media. "Close to the metal hardware acceleration performance" can also be translated for markets such as energy, automotive, banking, medical, etc.
The quick takeaway? Companies that haven't invested massively in hardware vertical integration are guaranteed losers in the next five years.
As a side-effect, the geopolitical pressures around ASML are not going away anytime soon.