However, companies need not be constrained to the local maxima you describe.
They can switch hardware platforms. In fact, Apple is the obvious successful example of this, where the Mac line has moved from Motorola to PowerPC to x86/x84. Not to mention, the introduction of an historically successful new product line on ARM.
The general problem with hardware platforms is that they have very high fixed start-up costs. This is exacerbated by the fact that they are moving quickly so that these start-up costs are incurred again and again for products on the forefront. The way to deal with this economically is have large scale. Usually that scale is achieved though a market in which multiple companies are the buyers. But in Apple's case they are apparently large enough to achieve that scale by themselves for the iOS lines so are able to bring that in-house and then get the additional advantage of control over the hardware.
Now, of cours, Apple's A-series SOCs may well reach a maxima at some point in the future, and then get bypassed by some other hardware technology (though it's not like the A-series is sitting still). That doesn't mean Apple can't or won't adopt that new platform. And if they don't, that has nothing to do with whether their old platform was in-house or out-of-house.)
In general, this is about gaining control over key technologies they rely on due to their scale and strategic planning, which is generally a good thing. Of course, they also need to execute, but that's true entirely aside from "going vertical".
They can switch hardware platforms. In fact, Apple is the obvious successful example of this, where the Mac line has moved from Motorola to PowerPC to x86/x84. Not to mention, the introduction of an historically successful new product line on ARM.
The general problem with hardware platforms is that they have very high fixed start-up costs. This is exacerbated by the fact that they are moving quickly so that these start-up costs are incurred again and again for products on the forefront. The way to deal with this economically is have large scale. Usually that scale is achieved though a market in which multiple companies are the buyers. But in Apple's case they are apparently large enough to achieve that scale by themselves for the iOS lines so are able to bring that in-house and then get the additional advantage of control over the hardware.
Now, of cours, Apple's A-series SOCs may well reach a maxima at some point in the future, and then get bypassed by some other hardware technology (though it's not like the A-series is sitting still). That doesn't mean Apple can't or won't adopt that new platform. And if they don't, that has nothing to do with whether their old platform was in-house or out-of-house.)
In general, this is about gaining control over key technologies they rely on due to their scale and strategic planning, which is generally a good thing. Of course, they also need to execute, but that's true entirely aside from "going vertical".