I've often observed that sometimes the key to business success is not always tied to introducing a product as much as it is tied to knowing when to cash out on that product..
The PC industry has several examples of this. Operating systems tend to absorb and offer useful functions. Think of the companies that used to offer disk compression software or DOS extenders. The operating system, in one way or another, consumed those functions. A better example would be people who make PC add in boards. In the "old" days you bought a motherboard and then you needed a range of add on cards -- disk controllers, sound cards, video cards, etc.
I'm guessing times got tougher and tougher for most of the companies that used to make these cards. Sure the big names are still around, but lots of little guys -- if they were smart -- sold out or crashed and burned.
Why? Because motherboards come with everything 99% of the users need now. Sound card? Network card? Video? You can even get motherboards with WiFi, integrated processors, and I was reading the other day that soon you'll be able to get motherboards with integrated SSD flash drives to boot from!
We are seeing this increasingly in the embedded systems market as well. An old 8080 system required a handful of support chips to get it running. Today, most embedded processors just need power and they are ready to roll. Granted, just as some audiophiles still want a sound card, you might want a crystal if you need precise timing (although the vendors are getting better at making onboard clocks pretty precise).
Things like external A/D converters, UARTs, and other external function blocks are getting harder and harder to sell in volume because most new processors have those built in. You have to build your market on people using older stuff, those that need something better than you typically find integrated (video card makers have excelled at this), or people who need more than they get on their CPUs (just like I have an extra sound card to cater to my ham radio).
Of course, just like motherboard integration is good for end users, SoC (System on Chip) integration is good for embedded developers. We can do more and more with less and less. Just make sure your design isn't something that will get gobbled into the system later -- or have your exit strategy ahead of time.