Remember, in a capitalist world, everybody is out to get your money. Whether it’s you wanting more pay, or the boss wanting to pay you less, or the price of groceries or monthly rent, everybody wants your money. Guess who wants Apple’s money? Apple.
Unlike Windows PC makers and Android smartphone makers, Apple clearly differentiates every product it makes via hardware and software. The Mac might use hardware similar to many PCs, but macOS is a clear and present differentiator. Likewise, iPhones and iPads use similar hardware components, but iOS is one of few distinct differentiators.
Nearly a decade ago Apple bought a chip design company and quickly moved to design and manufacture it’s own ARM-based CPUs for iPhone and then iPad. That gave Apple more control over hardware differentiation to match software differentiation. Since then, we’ve seen Apple expand its chip design prowess to include chips for Apple Watch, various MacBook and MacBook Pro models, and even AirPods.
Remember, everybody wants your money, so Apple works diligently to create a supply chain where no single component vendor can hold the company hostage. How is that working out? Well, Samsung makes the best OLED displays and they wound up in iPhone X, iPhone XR, and iPhone XS and XS Max. A Taiwan company manufactures Apple’s chip designs.
Qualcomm has something of a tight lock on the smartphone modem business and extracts the most money possible from every smartphone sold, including iPhones. Apple cut a deal with Intel to put their modems in some iPhone models, and there’s a huge set of lawsuits going on around the world– Apple vs. Qualcomm, the chip maker. Why? Apple doesn’t want to pay too much and Qualcomm wants Apple to pay more.
Since Apple has sufficient in-house prowess to design its own CPUs, graphic chips, Watch chips, and others, what would prevent the company from designing its own modems to replace Qualcomm and Intel?
Time, not money.
Apple is no different than you or me. Apple wants to keep more of its own hard-earned money, and not give it up to the Gestapo-like folks that run Qualcomm, Intel, Samsung, and other component makers. Competition is good for Apple components, too, and if Apple is working on its own modem design for future iPhones, competition for the company’s many vendors is good as well.
Here’s the problem.
5G is here. Or, rather, it will be here over the next few years. Guess which company has the best 5G chipsets to make smartphones connect to the future? Qualcomm. Guess which Cupertino CA-based company is working feverishly to create their own cellphone modems?
The CPUs and graphics capability in today’s iPhones are of Apple’s own designs, and are more powerful and capably than competitors. Only Apple knows when its own designs will be ready to get rid of Qualcomm and Intel Inside, but the handwriting is on the wall. Maybe not this year. Maybe not next year.
Apple is a purveyor of fine chip design already and money won’t stop it from making more. Now, if Apple would just buy Samsung…