Back in the day, long before Y2K, this question seemed settled. Apple
That wasn't the Microsoft brand on your PC, and Microsoft didn't veto applications running on Windows. In fact, when Microsoft made its first tentative effort to control software markets, through its Internet Explorer browser, the US Justice Department swatted it down, tying it up with lawyers who kept Microsoft from doing much of anything interesting for years and years.
China made Steve Jobs' revenge possible. Chinese OEMs could produce plenty of iPods, iPhones, and iPads to meet demand, leaving Apple free not only to design as it wished, but to control what it designed.
Now Apple calls the tune and everyone -- even Microsoft -- must dance to it. Microsoft's creation of
The bigger story is what happens before the sale. Apple has created a race toward complete vertical integration. Apple controls the chips, it controls the assembly process, its stores do the selling, and that "giant sucking sound" you hear is profit going into its Cupertino, Calif., headquarters.