Analysts: Apple’s push into chips could unnerve suppliers

“Apple Inc appears to be pushing toward designing its own microchips for the iPhone, a move that would give it greater control but inevitably affect its base of suppliers,” Gabriel Madway and Clare Baldwin report for Reuters.

MacDailyNews Take: No, ya think?

Madway and Baldwin continue, “The iPhone now uses chips from a variety of suppliers including Samsung Electronics Co Ltd, Broadcom Corp, Marvell Technology Inc, CSR Plc and Infineon Technologies AG, analysts say. If Apple succeeds in coming up with its own chip, it could potentially dislodge at least one of these companies from the iPhone, while sending notice of its intent to take an even bigger role in the creation of its products.”

“Apple’s semiconductor strategy has been apparent for at least a year, analysts say, pointing to its acquisition of microchip company PA Semi and its hiring of experts from chip companies like Advanced Micro Devices Inc.,” Madway and Baldwin report. “‘It’s not chatter,’ said Broadpoint AmTech analyst Doug Freedman. ‘The cat’s out of the bag.’ But even so, it would take about two years for Apple to come up with a chip, said Freedman. ‘I don’t think there’s any material impact to the supply chain for another year or two — maybe longer,’ he said.”

Madway and Baldwin report, “Analysts say Apple is working on developing an application processor for the iPhone, which is currently supplied by Samsung. Application processors control advanced features on phones, such as multimedia capabilities. ‘Apple is basically saying we don’t want to put our future in somebody else’s hands,’ said Craig Berger, an analyst with FBR Capital Markets. ‘The key for them is super low-power and better graphics processing.'”

“Kaufman Bros. analyst Shaw Wu believes Apple has been working on an application processor for the iPhone for around a year. He agreed that any new chip is at least a year away and won’t make it into the next iPhone, which is expected to be released this summer,” Madway and Baldwin report. “Observers say it makes sense for a company like Apple, which tightly manages its intellectual property, to want more control over the most important pieces in one of its hottest products — more than 21 million iPhone units have been shipped since its launch in 2007. ‘Apple is one of the few guys out there who can pull it off,’ Wu said.”

Read more in the full article here.

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

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.