You're correct - at one point in the late 70s or even the early 80s, IBM was the biggest chip manufacturer in the world but all of the produced chips were used in their own products.
there was even a kind of "cloud computing": "time share computing"[0], since mainframe computers were financially our of reach for anyone but the very largest companies.
IBM was _the_ prototypical vertically oriented company back in the late 70s before the PC - manufacture chips, build boards, build computers ranging from desktop to mainframes, develop the OS, provide finance for customers, offer integration services. Apple is nothing compared to IBM in its heyday.
When I joined IBM in 1991, it was still a very inwardly focused company. Although it was clear that things were going to be changing rapidly in the industry, it was hard to get employees to understand how precarious things were - until the big layoffs of the mid 90s.
