Why doesn’t Apple own the whole stack?

“We believe that we need to own and control the primary technologies behind the products that we make…” — Tim Cook, The Cook Doctrine

From Will Gomez’ “Apple Has A Problem Owning Its Technology” posted Tuesday on Mac360:

Apple chooses premium hardware components for Mac, iPhone, iPad, Watch, et al, but also differentiates each product via macOS, iOS, watchOS, and ensures they integrate well with each other. Yet, for all that differentiation, Apple does not own most of the important technology components it uses in its devices.

Apple co-founder Steve Jobs once envisioned a factory where sand was brought in the doors at one end and computers were distributed from the other end…

For the Mac, Apple does not build the primary technologies—other than the operating system—[not the] display, RAM, CPU, battery. Likewise, for iPhone, Apple uses many of the same components—with one exception—that are available to competitors, and that weakness was on display recently and caused the Cupertino company to cave into Qualcomm’s exorbitant licensing deals for 5G modems.

iPhone displays come from Samsung. iPhone and iPad CPUs are designed by Apple but manufactured by Taiwan’s TSMC. In fact, while Apple may dictate specifications, much of every Apple product is manufactured by a growing list of component suppliers.

My take: The standard Gomez applies (sand in one door, computers out the other) was always a Jobsian fantasy. And Cook would probably argue that the exceptions Gomez glosses over—the operating system, the A-series chips, the specs Apple “may dictate”—those ARE the primary technologies. Those and Qualcomm’s IP.

See also:

• Apple-Qualcomm settlement: What the analysts are saying
• WashPo: Sealed Qualcomm docs show Apple’s ‘bad faith’
• UBS: Apple and Huawei paid Qualcomm $6.4 billion in royalties in arrears

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