Apple’s Tight Integration of Hardware, Semiconductors, and Software Undergirds Its Wide Moat

We believe Apple has solidified its long-term position at the forefront of the consumer electronics industry, focusing on a premium ecosystem of tightly integrated hardware, software, and services. We see the flagship iPhone as the linchpin of this ecosystem, from which Apple derives pricing power, switching costs, and a network effect. In our view, every other Apple device and service sees its greatest value from further locking in customers to this walled garden. This approach earns the firm a wide economic moat rating.