Apple design activity spurs $3.8B in semiconductor purchases
Apple's product design activity in the first half of 2007 drove the largest increase in semiconductor spending among the Top-10 electronics OEMs in the United States, according to iSuppli.
"The huge success of the iPod and iPhone lines has made Apple Inc. one of the most influential companies in the high- tech world today, with its products widely admired by consumers and frequently imitated by competitors," the market intelligence firm wrote in its latest report. "However, Apple is wielding another kind of influence behind the scenes, with the company's Silicon-Valley-based product design activity in Cupertino, Calif. exerting a major impact on the global electronics supply chain."
According to iSuppli's Regional Design Influence Tool (RDIT), Apple achieved the fastest growth of design influence of any company in the United States during the first half of 2007. The surge boosted the company's rank to No. 4 overall, trailing just Hewlett-Packard Co., Dell Inc. and Motorola.
"The design of electronic goods leads directly to equipment production, which in turn drives semiconductor purchasing," said Min-Sun Moon, analyst, OEM semiconductor spending and design influence for iSuppli. "Companies that engage in design of electronic equipment, such as PCs, mobile phones and televisions, also are responsible for specifying the use of particular chips in the products being developed. Thus, these companies have a major influence on global semiconductor spending patterns."
Specifically, Apple's design activity in the United States is reported to have spurred $3.8 billion worth of global semiconductor purchases in the first half of 2007, up 27 percent from $3 billion in 2006. The surge in influence is attributed mostly to the recent release of the company's iPhone handset.
iSuppli forecasts Apple will ship more than 4.5 million iPhones globally in 2007, 13.5 million units in 2008 and 21.1 million units in 2009. The firm also believes a second version of the iPhone will be released in the next 12 to 18 months.
"The initial iPhone model plus the new version or versions of the product will cause Apple's design influence among electronic equipment and semiconductor spending to continue to grow into the second half of the year as well as into 2008," the firm said.
The United States led the world in terms of design influence in the first half of 2007, accounting for 34.4 percent of the worldwide total. Japan came in second with 21.8 percent.
Beyond Apple, Hewlett-Packard, Dell and Motorola, iSuppli said other leading design influencers in the United States in the first half included Cisco Systems Inc., Kingston Technology Co. and IBM.
"The huge success of the iPod and iPhone lines has made Apple Inc. one of the most influential companies in the high- tech world today, with its products widely admired by consumers and frequently imitated by competitors," the market intelligence firm wrote in its latest report. "However, Apple is wielding another kind of influence behind the scenes, with the company's Silicon-Valley-based product design activity in Cupertino, Calif. exerting a major impact on the global electronics supply chain."
According to iSuppli's Regional Design Influence Tool (RDIT), Apple achieved the fastest growth of design influence of any company in the United States during the first half of 2007. The surge boosted the company's rank to No. 4 overall, trailing just Hewlett-Packard Co., Dell Inc. and Motorola.
"The design of electronic goods leads directly to equipment production, which in turn drives semiconductor purchasing," said Min-Sun Moon, analyst, OEM semiconductor spending and design influence for iSuppli. "Companies that engage in design of electronic equipment, such as PCs, mobile phones and televisions, also are responsible for specifying the use of particular chips in the products being developed. Thus, these companies have a major influence on global semiconductor spending patterns."
Specifically, Apple's design activity in the United States is reported to have spurred $3.8 billion worth of global semiconductor purchases in the first half of 2007, up 27 percent from $3 billion in 2006. The surge in influence is attributed mostly to the recent release of the company's iPhone handset.
iSuppli forecasts Apple will ship more than 4.5 million iPhones globally in 2007, 13.5 million units in 2008 and 21.1 million units in 2009. The firm also believes a second version of the iPhone will be released in the next 12 to 18 months.
"The initial iPhone model plus the new version or versions of the product will cause Apple's design influence among electronic equipment and semiconductor spending to continue to grow into the second half of the year as well as into 2008," the firm said.
The United States led the world in terms of design influence in the first half of 2007, accounting for 34.4 percent of the worldwide total. Japan came in second with 21.8 percent.
Beyond Apple, Hewlett-Packard, Dell and Motorola, iSuppli said other leading design influencers in the United States in the first half included Cisco Systems Inc., Kingston Technology Co. and IBM.
Comments
Apple had some great designs that they knew would be popular with consumers, so they
bought up a lot of semiconductors, while other semiconductor-purchasing companies
continued to buy at the same rate they had previously, as they underestimated Apple's
coming impact in their industry?
Does this mean some other companies have extra product sitting around now,
and that they will purchase fewer semiconductors in the coming months?
Will the pendulum swing the other way, then? Surely not all Apple's semiconductors went
to totally new customers just entering the marketplace. Most of this increase has
to cause a decrease somewhere else.
Am I wrong?
They are not talking about physical design. They are talking about semi conductor design.
I disagree. They are talking about product design. Physical design of products like the
iPhone that consumers snap up, leading to semiconductor (raw material) purchases.
I disagree. They are talking about product design. Physical design of products like the
iPhone that consumers snap up, leading to semiconductor (raw material) purchases.
That's how I understood it too. Designs that increase the sales of semiconductors. Even if they were talking about semiconductor design, I believe Apple have had a bigger influence in that area too, asking Intel to include certain features to the Core range, bringing them more in line with PowerPC. Apple have had chips supplied exclusively to them for a while before other manufacturers have been allowed to use them too.
What missing here? What about the contrbution of Microsoft and Zune?
uh...
what contribtion?
The thing is a non-product in comparison with iPod and iPhone. The Zune doesn't really matter. It only sort of did for about two months. the Creative Zen series has more of an impact.
Apple is the major player now.
That's how I understood it too. Designs that increase the sales of semiconductors. Even if they were talking about semiconductor design, I believe Apple have had a bigger influence in that area too, asking Intel to include certain features to the Core range, bringing them more in line with PowerPC.
Do you have any specific feature examples?
Apple have had chips supplied exclusively to them for a while before other manufacturers have been allowed to use them too.
That in itself doesn't mean that the circuitry is altered because of what Apple wants, that just means that they get some chips early or get special binnings, as was the case with their eight core workstation. It's possible, but I don't know if they have that much impact. Maybe PortalPlayer added features to their chips because Apple was their biggest customer for a while there. Samsung might have done the same with their own ARM chip to attract Apple's interest.
This is though, complete speculation.
I do know that Apple had an influence in the PowerPC, and I don't think it's beyond the realms of possibility that Apple could have asked for certain features in the core series from Intel. Apple have experience in different chips, and what makes each better than the other.
As a co-developper of PowerPC chips, Apple could licence to Intel the multimedia instructions that consistently allowed PowerPC chips to "beat" x86 chips when decoding multimedia content. Old timers will remember the Mac vs. PC performance ads.
If I am not mistaken, the SSE4 instructions which will make a debut with Penryn class 45 nm processors, are Apple's gift to Intel, the multimedia instructions originally co-developped for PowerPC processors.
"Companies that engage in design of electronic equipment, such as PCs, mobile phones and televisions, also are responsible for specifying the use of particular chips in the products being developed. Thus, these companies have a major influence on global semiconductor spending patterns."
The whole article means that Apple engineers select electronic parts to be included in Apple products, favoring some component suppliers over others who offer similar, but slightly different chips.