Apple pays chip architect Arm less than 30 cents in royalties for each chip it uses in Macs, iPhones, iPads, Apple TVs, Apple Watches, and HomePods, The Information reports.
Hartley Charlton for MacRumors:
Despite being one of its biggest and most important customers, Apple represents less than five percent of Arm’s annual revenue, with the company paying the least of any of Arm’s smartphone chip customers. Apple pays a flat fee of less than 30 cents in royalties for each chip used in its devices, regardless of how many cores it has.
SoftBank is the owner of Arm, and in 2017, the company’s CEO gathered Arm executives and explained that Apple pays more for the piece of plastic that used to be used to protect the screens of new iPhones than it does to license Arm’s intellectual property. SoftBank’s attempts to renegotiate Arm’s deal with Apple to raise royalty rates were apparently unsuccessful.
MacDailyNews Take: Arm was founded in November 1990 as Advanced RISC Machines Ltd and structured as a joint venture between Acorn Computers, Apple, and VLSI Technology. The late Apple VP Larry Tesler — the primary inventor of Cut, Copy, Paste — was a co-founder of the Arm joint venture.
Without Apple, there is no Arm. Apple today is merely benefitting from financially backing, creating, and contributing to Arm over decades of work.
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A couple other pieces of critical info:
Apple helped create ARM (Advanced RISC Machines Ltd.) back in 1990 and used the first ARM processor in the Newton MessagePad. However, after abandoning the project for PowerPC and later Intel chips, Apple didn’t use ARM-based processors in its products until the original iPhone. It has been reported that Apple has an “architecture license” with ARM, which allows the company to design its own cores using the ARM instruction set.—In other words, Apple does all the heavy lifting in designing and funding the fabrication of their highly customized ARM chips.
$735 million—Apple was among a number of large technology companies that that on Tuesday invested $735 million in Arm’s initial public offering. Reuters last week was the first to confirm that Apple was among the strategic investors who agreed to buy shares. (Sept 2023)—could the news of such an investment possibly have boosted ARM’s recent IPO?
Apple struck a deal with Arm through 2040 and “beyond,” ARM said in a SEC filing on back in September—just before ARM went public with an IPO. Do you also think that maybe, possibly, that long-term deal with Apple could have kinda, like boosted the share price of ARM’s IPO along with the previously mentioned $735 million investment?
Read carefully: the reported “30 cents” royalty is from a 2017 meeting. No word on the royalties from the renegotiated agreement which took place just a couple months ago in which ARM clearly decided it was in their best interest to set up a LONG-term agreement with Apple till 2040.
thanks for sharing that info.
ironically, because of all the Apple haters, if Apple did decide to actually by ARM back in the day… it would have hindered the architecture’s adoption. Despite RISC-V, the operating systems running on ARM has all the financial backing to continue forward and doesn’t limit it’s ability to adopt any architecture improvements presented by RISC-V.
If anything, I it seems the Softbank overpaid or didn’t know how to capitalize on their purchase of ARM
because Apple invented it just like they invent most things without fanfare (thunderbolt micro sims usb3 connector …. but they let it go for others to release and take the credit so long as Apple have forever deals in place in its use.