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Apple remains world's largest chip buyer, projected to spend $28B this year

post #1 of 21
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Apple continues to dominate the global electronics supply chain, and is expected to widen its lead as the largest buyer of chips by spending $28 billion in 2012.

The latest data from IHS iSuppli forecasts that Apple's chip expenses will increase by 15.1 percent in 2012, up from the $24.3 billion the company spent in 2011. That will widen Apple's lead over Samsung, which is expected to spend $14.9 billion on semiconductors this year, up just 0.3 percent from 2011.

Half of the companies in iSuppli's top 10 are expected to decrease their spending on semiconductors in 2012. Hewlett-Packard, Dell, Panasonic, Cisco Systems and Fujitsu are all expected to reduce their chip expenses this year.

iSuppli that Apple's lead in semiconductor purchasing has been maintained because the company continues to see strong demand for its products, and has also maintained what were referred to as "beneficial relationships" with more than 150 suppliers.

"It?s well known that Apple has already conquered the smartphone and tablet segments—but behind the scenes the company is engaging in another kind of conquest: the dominance of the electronics supply chain," said Myson Robles-Bruce, senior analyst for semiconductor spending and design activity at IHS. "Such a dominant position provides critical benefits, allowing one to dictate semiconductor pricing, control product roadmaps and obtain guaranteed supply and delivery. For Apple, these benefits translate into competitive advantages, letting it offer more advanced products at lower prices, faster and more reliably than the competition."

iSuppli


Apple's projected 15.1 percent growth in chip expenses in 2012 is more than three times greater than the next-fastest-rising purchaser, Canon, which is expected to see a 4.6 percent increase this year.

And in a more long-term forecast, Apple is expected to once again grow its chip purchasing in 2013 by 12.3 percent. The iPhone maker is expected to remain the top buyer of semiconductors and to once again see the greatest growth among the top 10 chip purchasers next year.

"Apple will continue to outgrow the other major OEMs in chip purchasing because of its clear vision of the future, which extends a few years out," Robles-Bruce said. "This vision includes a strategy to not only update currently popular products but also achieve success in other areas of interest like the television segment."

Earlier this year, iSuppli identified Apple as leading the global trend in chip expenditures migrating to wireless devices. Aided by strong sales of Apple's products like the iPhone and iPad, smartphone and tablet semiconductors now exceed sales of traditional computer chips.

In January, Gartner identified that Apple had become the world's largest buyer of semiconductors. It estimated that Apple spent $17 billion on semiconductors in 2011, representing 34.6 percent growth from the previous year.
post #2 of 21

This story and the chart doesn't seem to square with the previous story about Samsung doubling Apple on iPhone shipments.  Samsung show barely any growth to Apple's 15% but gosh darn it, Samsung/Google are winning on shipments and activations.  

post #3 of 21
Quote:
Originally Posted by markbyrn View Post

This story and the chart doesn't seem to square with the previous story about Samsung doubling Apple on iPhone shipments.  Samsung show barely any growth to Apple's 15% but gosh darn it, Samsung/Google are winning on shipments and activations.  

 I was thinking the same thing. If Samsung pushed 50+ million smartphones into the channel, isn't that more than the total number of iPhones, iPads, and Macs combined sales last quarter? And Samsung sells PCs too. Obviously one or both of these articles is based on speculation that is highly inaccurate.

 

However, the article cleverly only acknowledges the amount of money paid, not the number of chips purchased. Maybe Samsung's chip division gives it's production division a deep discount? Lol.

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post #4 of 21
Quote:
Originally Posted by markbyrn View Post

This story and the chart doesn't seem to square with the previous story about Samsung doubling Apple on iPhone shipments.  Samsung show barely any growth to Apple's 15% but gosh darn it, Samsung/Google are winning on shipments and activations.  

 Is this partly due to the fact that as a manufacturer, Samsung don't have to buy all of their chips?

post #5 of 21
Quote:
Originally Posted by AdyB View Post

 Is this partly due to the fact that as a manufacturer, Samsung don't have to buy all of their chips?

 They are different businesses under the same umbrella. They have to at least move pools of money from one account to another when buying their own chips. Then again, Samsung deletes all their email after 2 weeks so no one would ever know anyway.

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post #6 of 21
Quote:
Originally Posted by AdyB View Post

 Is this partly due to the fact that as a manufacturer, Samsung don't have to buy all of their chips?

Which begs the question will Apple, one day, control their own chip development and production?
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post #7 of 21

Samsung sell over four cheap "smart" phones for each of their flagships.

 

Phones such as this with a 600MHz processor, 240x320 pixel screen.

 

Phones like these will never see ICS or JB and dominate Android sales, this is easily seen by the comparatively small number of Android phones running 4,0 and above and the pitiful profits Android OEM's make.

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post #8 of 21
Quote:
Originally Posted by silverpraxis View Post

 They are different businesses under the same umbrella. They have to at least move pools of money from one account to another when buying their own chips. Then again, Samsung deletes all their email after 2 weeks so no one would ever know anyway.

Hey it's just common practice in Korea, to delete your mail after two weeks. /s

post #9 of 21
Quote:
Originally Posted by digitalclips View Post

Which begs the question will Apple, one day, control their own chip development and production?
Nah, one of the first things Tim Cook did was to get Apple out of manufacturing. It's a low margin business and Apple wasn't good at it.

Apple is spending a good amount of effort these days in controlling their own chip development as an ARM licensee, with their acquisitions of PA Semi, Intrinsity, and Anobit.
post #10 of 21
Quote:
Originally Posted by markbyrn View Post

This story and the chart doesn't seem to square with the previous story about Samsung doubling Apple on iPhone shipments.  Samsung show barely any growth to Apple's 15% but gosh darn it, Samsung/Google are winning on shipments and activations.  

That was just measuring smartphones, not all the other devices Apple sells. If you add up all other iOS-baed devices Apple sold that quarter it pretty close to predicted numbers to Samsung and it doesn't even include the other iPods or Macs.

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

 

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post #11 of 21
Quote:
Originally Posted by silverpraxis View Post

However, the article cleverly only acknowledges the amount of money paid, not the number of chips purchased. Maybe Samsung's chip division gives it's production division a deep discount? Lol.

And all silicon doesn't cost the same. People had claimed for year that the MBA was just an overpriced netbook yet you look at the CPU in a netbook and it costs $30 from Intel and you look at the CPU in the MBA and it's $350. That's right around the cost of the entire network for just the CPU in the MBA.

If we're talking just about expenses Apple easily comes out ahead. It's well know Apple uses more higher-end components than their competitors. We see it with Apple owning nearly every $999+ PC sale, we see it on the PMP dominance, we see it on the tablet dominance, and we see it on the handset dominance. Samsung may sell more smartphone in name the way Android is activated on 50 trillion smartphones per minute but when you measure a comparable smartphone to the iPhone very few are using modern components. For example, the Samsung S III looks like a great Android-based phone and it also looks to be selling well but it's outselling the iPhone and it doesn't account for most of Samsung's smartphone sales around the world.

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

 

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post #12 of 21
Quote:
Originally Posted by digitalclips View Post

Which begs the question will Apple, one day, control their own chip development and production?

He who controls the spice controls the universe.

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

 

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post #13 of 21
Quote:
Originally Posted by AdyB View Post

 Is this partly due to the fact that as a manufacturer, Samsung don't have to buy all of their chips?

 

That's in Billion in US dollars, not # of units.  Apple also buys a lot of CPUs from Intel - Samsung's desktop/laptop sales don't amount to much. 

post #14 of 21
Quote:
Originally Posted by SolipsismX View Post


He who controls the spice controls the universe.

 

YES!!

post #15 of 21

http://www.wantchinatimes.com/news-subclass-cnt.aspx?id=20120726000117&cid=1206&MainCatID=12

 

I've seen this reference to an iPhone 5 delay due to Qualcomm production problems. Anyone else hear anything?

post #16 of 21
Quote:
Originally Posted by digitalclips View Post


Which begs the question will Apple, one day, control their own chip development and production?

 

Apple is in marketing business, not in manufacturing.  Apple can't maintain its fat profit margin with its own development and production. 

post #17 of 21
Quote:
Originally Posted by JollyPaul View Post

http://www.wantchinatimes.com/news-subclass-cnt.aspx?id=20120726000117&cid=1206&MainCatID=12

I've seen this reference to an iPhone 5 delay due to Qualcomm production problems. Anyone else hear anything?

It's possible there could be delays of the 6th gen iPhone due to a component issue. I doubt they can still use the 45nm lithography moving forward.

That would be for the cellular so if worst comes to worst I wonder if Apple would instead just postpone LTE instead of missing a holiday quarter.

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post #18 of 21
Quote:
Originally Posted by SolipsismX View Post


And all silicon doesn't cost the same. People had claimed for year that the MBA was just an overpriced netbook yet you look at the CPU in a netbook and it costs $30 from Intel and you look at the CPU in the MBA and it's $350. That's right around the cost of the entire network for just the CPU in the MBA.
If we're talking just about expenses Apple easily comes out ahead. It's well know Apple uses more higher-end components than their competitors. We see it with Apple owning nearly every $999+ PC sale, we see it on the PMP dominance, we see it on the tablet dominance, and we see it on the handset dominance. Samsung may sell more smartphone in name the way Android is activated on 50 trillion smartphones per minute but when you measure a comparable smartphone to the iPhone very few are using modern components. For example, the Samsung S III looks like a great Android-based phone and it also looks to be selling well but it's outselling the iPhone and it doesn't account for most of Samsung's smartphone sales around the world.

Heh... the original MBA was an overpriced netbook. It was underclocked and lacked many features of the current design. It was also $1800~ in its base configuration. Placing it at the low end of Apple's price range helped make it attractive to those who just want a Mac. In terms of higher end components, I'm not sure about that. The 13" macbook pro and and the 11" Air are often suggested as extremely high volume products. If you look at a teardown of either, the case is nice, the trackpad is nice, display is a fairly typical implementation (people sometimes regard LED as special yet it's found on $100 displays), cooling system is basically normal, cpu options don't become expensive until you push toward the upgrade options. I'm curious what you mean by modern components.

Quote:
Originally Posted by SolipsismX View Post


He who controls the spice controls the universe.

 

 I would definitely rent a fight between Tim Cook and Sting off itunes.

post #19 of 21
Quote:
Originally Posted by hmm View Post

Heh... the original MBA was an overpriced netbook.
the Intel C2D and full-sized keyboard were worlds apart from any Atom with a cramped keyboard. There was nothing netbook about it. Being slower than 13" MB/MBP doesn't mean it's as slow and crappy as a $300 netbook.
Quote:
It was underclocked and lacked many features of the current design.

Of course, that was several years ago and a lot has evolved since then. First and foremost Intel's CULV processors have become a major focus for Intel's R&D. Besides an increase in performance with a lower TDP the price has also dropped for relative performance because they are selling well, thanks to Apple's initiative.

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post #20 of 21
Quote:
Originally Posted by SolipsismX View Post


the Intel C2D and full-sized keyboard were worlds apart from any Atom with a cramped keyboard. There was nothing netbook about it. Being slower than 13" MB/MBP doesn't mean it's as slow and crappy as a $300 netbook.
Of course, that was several years ago and a lot has evolved since then. First and foremost Intel's CULV processors have become a major focus for Intel's R&D. Besides an increase in performance with a lower TDP the price has also dropped for relative performance because they are selling well, thanks to Apple's initiative.


Bleck.. I was hoping you'd respond to the Dune portion >:(.  Intel has also finally given some thought to integrated gpus too for more balanced budget options. Regarding the original macbook air, it wasn't that well received. Right now it has the incredibly  thin form factor and its price both both in its favor. I'm not sure the tapered design will stick around forever though. I always thought it was gimmicky. They needed it to stand out based on thickness. I prefer the rMBP in that regard. They went for port allocation and battery rather than tapering.

post #21 of 21
Quote:
Originally Posted by hmm View Post


Bleck.. I was hoping you'd respond to the Dune portion >1frown.gif.  Intel has also finally given some thought to integrated gpus too for more balanced budget options. Regarding the original macbook air, it wasn't that well received. Right now it has the incredibly  thin form factor and its price both both in its favor. I'm not sure the tapered design will stick around forever though. I always thought it was gimmicky. They needed it to stand out based on thickness. I prefer the rMBP in that regard. They went for port allocation and battery rather than tapering.

For the price range it did very well which is why we saw copycat right away and why it's become such a focus for Apple. Apple didn't say "Now that we can drop the price by 35% let's start caring about this product." It was the foundation for the future of all their notebooks and it helped get Intel to focus on components that it helped to bring down the price sooner rather than later. The MBA was an important and successful part of Apple's Mac future.

I quite like the tapering. It does add a little more ease to putting it and pulling it out bags. I had hoped the new MBPs would go the same route. As for thickness, remember that these machines are often measured by thickest part — unless you're not Apple then you're compared to Apple with your thinnest part (e.g.: Moto Droid Razr) — so if the new MBP had been tapered it would have been thicker than it is now at the back to contain the same total performance. So that can go either way. Personally, my primary concern is longer battery life so I'll take whatever offers me the most in that, everything else is gravy.

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

 

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