Alex Web for Bloomberg Opinion:
It risks becoming Apple Inc.’s signature bait-and-switch move.
After years of developing technology with a supplier, the iPhone maker pulls the plug on the collaboration. It then buys up that business, which has limited prospects without Apple’s custom, and continues the development in-house.
It happened last year with Dialog Semiconductor Plc, the maker of power-management chips. This time it’s the turn, remarkably, of Intel Corp., the world’s second-largest semiconductor maker.
Apple is in talks to acquire Intel’s modem unit, technology website The Information reported on Tuesday… To be sure, Apple may be providing something of a soft landing for Intel… It’s reasonable to expect Apple to pay more than the $3 billion it spent acquiring Beats Electronics in 2014, its biggest-ever acquisition. But you can’t blame Intel if it feels a little used. As with many companies, Apple prefers to have a multi-supplier strategy where possible: playing them off against one another helps eke out lower component prices.
MacDailyNews Take: “Apple Inc.’s signature bait-and-switch move.” Or, in other words: Smart business.
Of course, Apple plays component suppliers, even incompetent ones like Intel, against their rivals to achieve lower prices; Apple would be foolish not to.