Apple set to make its own ARM chips for iPhone, iPod touch, and future devices?

“Tony Fadell… is stepping down as [Apple’s] head of SVP for the iPod division. (Fadell replaced Nextie and Friend-of-Steve Jon Rubinstein.) Fadell is being replaced by Mark Papermaster, VP for blade server development at IBM,” Joel West writes for Seeking Alpha.

“Once upon a time, I claimed that Apple’s iPod and iPhone were an example of open innovation: Apple sourcing outside rather than using its 1990s-era NIH,” West writes.

“It appears I was wrong: open innovation (sourcing outside components) was an entry strategy for the iPod and iPhone, but the goal was always vertical integration. With iTunes, iTunes Music Service, OS X on the iPhone and now the new mystery chip, Apple will be more vertically integrated than it ever was on the Apple II or Macintosh,” West writes.

Full article here.

[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]

Vertical integration works best for those who matter most: the users.


  1. MDN Take: “Vertical integration works best for those who matter most: the users.”

    …unless we’re talking the old AT&T near-monopoly back before the antitrust breakup of the company – vertical integration didn’t help the users so much there.

  2. Hey Gabriel !!!!!!!

    Who built the physical back bone (installed poles, stretched the cable Built the actual phones, switch stations. They did everything ). If Ma Bell (AT&T;) had not done this who would have. Their Vertical integration is the foundation for what we have today.

  3. Why would a man want to go back to the same-ol same-ol when given a chance to expand his horizons? Sure, Apple has a semiconductor arm and may be using that arm to create a new processor for use with its ultra-portable line of computers (the iPhones and touches) but they bought the talent to make that happen already. Papermaster worked on larger-scale chips and may well have little to offer for smaller-scale chip design … not so much that would make it even a part-time job for him.
    There is plenty for him to do within Apple that does not require he violate any non-compete agreement, legal or otherwise. Let him settle in before asking him to run the recently-purchased Sun subsidiary.

  4. Blanket statements without context make me uneasy. I’m very much in favor of Apple’s current flavor of vertical integration. But let’s not fool ourselves into thinking that vertical integration, in and of itself, is *always* a good thing for users.

  5. @ Gabriel:

    While the pricing models the old AT&T;used weren’t always in the consumer’s best interests, it did provide very, very reliable phones and phone service. Those phones you rented could just about be run over by a truck and still work.

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