Apple boss Cook wants to get rid of his suppliers

Apple

The Californian group is increasingly using self-developed components in its devices.

(Photo: Bloomberg)

Munich, San Francisco The clock is ticking for Apple’s suppliers. The iPhone manufacturer is developing more and more components itself. Long-term partners such as Broadcom, Samsung and Qualcomm have to be prepared to lose a significant part of their business with the Californians in the next few years. Apple boss Tim Cook focuses on chips and displays.

In addition, the manager relies more on manufacturing in America. Cook is thus making a U-turn from his former strategy. Under his leadership, Apple had geared its supply chains almost exclusively to manufacturing at partners in Asia. For the first time in about a decade, Apple will soon be using US-made chips in its devices again, Cook recently announced while visiting a new semiconductor factory of Taiwanese manufacturer TSMC in the US state of Arizona.

Apple has been using proprietary processors in its computers and smartphones for some time. Processors are the brain of every computer. This particularly affected the long-standing house and court supplier Intel. Now there are two other major American semiconductor companies to worry about their Apple sales, both of which have factories only in Asia: Broadcom and Qualcomm.

Difficult relationship with Qualcomm

From 2024 onwards, Apple could become independent of third-party companies for the new 5G mobile communications and WiFi transmission technology, reports the financial information service Bloomberg. At the Apple site in Munich, the engineers have been working for years on designing cellphone chips themselves as far as possible. So far, however, it has not been possible to surpass the technical level of the suppliers in all areas. However, this is the prerequisite for replacing them, Cook explained during a visit to the Bavarian state capital in autumn.

Top jobs of the day

Find the best jobs now and
be notified by email.

The relationship with Qualcomm in particular is considered difficult. The San Diego-based company is the world leader in cellular chips and holds numerous patents without which it is impossible to produce a competitive smartphone. A few years ago, Apple accused Qualcomm of charging excessive license fees in court cases. Since then, it has only been a matter of time before Apple becomes independent of Qualcomm. Qualcomm boss Cristiano Amon had already agreed with investors that the group could lose Apple as a 5G customer in the 2024 fiscal year.

graphic

Deutsche Bank estimates that by 2024, Apple could divest around 80 percent of its modem business from Qualcomm. That should cost Qualcomm around 15 percent of its sales, analyst Ross Seymore suspected. These chips are about the connection to the different mobile networks. The components are challenging to develop because every network is different and the Apple devices are supposed to work worldwide.

Custom displays for Apple watches

Analyst Ming-Chi Kuo from TF International Securities assumes that Apple could do without Qualcomm in 2025 at the earliest. He comes up with this assumption because Apple does not want to release the new version of the cheaper SE iPhone series, which was originally planned for next year, in 2024. In this series, Apple wanted to test its own chips first before they are used in top devices like the iPhone 16. However, there will be no new version of these cheaper iPhones next year. The mobile phone manufacturers have already been informed about this.

>> Read here: US group keeps its only German chip factory

Apple could take another step to make itself more independent and also use its own displays. From the end of next year, Apple plans to no longer purchase the screens in the group’s high-priced watches, called Apple Watch, from suppliers such as Samsung and LG, but to develop them themselves. This is also reported by Bloomberg.

Samsung

The Korean IT group Samsung has to fear for its customer Apple.

(Photo: Bloomberg)

Apple itself does not comment on this. Even today, the company does not buy any standard displays from the Korean groups Samsung and LG, but commissions the companies with very specific specifications. The latest speculation is likely to indicate that Apple wants to have more assemblies developed by its own teams. However, further suppliers are likely to be commissioned with the final production.

In his new course, Cook benefits from the fact that US President Joe Biden, with the support of Democrats and Republicans, has launched a multi-billion dollar subsidy program for semiconductor manufacturing in America. TSMC, Samsung and Intel are building huge new chip factories in America. Apple has never had so much choice among possible producers for its self-developed semiconductors.

More: The US is subsidizing itself to be the world leader when it comes to chips

source site-13