The Smiling Curve, originally created to explain the PC market, is one of the best frameworks to understand how the Internet is transforming industries, especially publishing.
Publishers used to live at the point of integration. The value of that integration, though, is gone with the Internet, which means value flows to suppliers and aggregators.
The implication of the Smiling Curve is not only that aggregators have increased economic power, but that differentiated suppliers do as well; Omni Software is an example.
Intel is buying Mobileye; it’s an acquisition that makes sense once you realize how much value there is in components.