I just saw a video interview by the Wall Street Journal of David Kelley, the founder of design firm IDEO. Kelley worked with Steve Jobs and Apple, and his firm designed the first Apple mouse. Kelley said his number one lesson from working with Jobs was to "do everything to the hilt." He remembered how Jobs insisted that internal screws used on Apple computers be made and finished a certain way. His experience with Apple made him realize that "you can do the smallest thing and do it in an extreme way." Very few companies making products used every day pay meticulous, painstaking attention to design details. Total commitment to the best designs -- designs that can only be implemented through use of the best/latest materials, technologies, and manufacturing techniques -- is rare. Most companies push for good enough designs and stop there.
A company needs deep integration, resources, and capabilities to push the envelope and create the best designs using the latest materials and technologies. It's much harder for a low cost modular company assembling standardized parts to produce a cutting edge, best-in-class design, since it lacks the capabilities and financial resources needed to do so -- it's difficult for a modular assembler to take on this kind of "you bet the company" risk.
And that's why Apple's commitment to the best, most cutting-edge designs, and its painstaking attention to the smallest details, are such great differentiators. Few companies have the integration, resources, and capabilities needed to compete this way. Few companies are willing to even try competing this way.
The corollary of all this is that integrated companies with deep resources and capabilities should be able to consistently produce better product designs -- and therefore more useful products -- than modular companies.
With consumer products used every day, where the best user experience will always be appreciated by at least a subset of the consumer market, close attention to detail and design isn't a wasted effort. See posts titled "How Apple Changes What's 'Good Enough,'" "Product Aesthetics and Jobs-to-be-Done," and "Apple's Design Strength Prevents Overserving."
The author owns stock shares of Apple.