Apple taking the application processor business in house has gone very well, they currently have a substantial tech lead in the smart watch market due to their processor advantage over the outdated qualcomm most android devices are stuck with [1].
They have a similar (but smaller) advantage in phones, though that is also due to a very large die size as they can afford to spend more per product.
Presumably they are looking at moving power management silicon in house as well to consolidate that advantage. At there scale, they will be getting custom silicon from Dialog already, but there's probably some comms/cost benefits to dealing with a department rather than an external company.
Apple starts a relationship with a company, the deal becomes the VAST MAJORITY of the company's revenue, the company wants to get out of the buisness of being an apple supplier, because IF they scale to that size and lose a contract, they have huge cuts to make. So apple comes in, buys a substantial part of the company, and now the company can continue to operate without fear of downsizing. Any downsizing will be apples doing not theirs.
When you get most of your money from one or two sources you aren’t really in control anymore. I can totally appreciate not wanting to be beholden to anyone.
The last consulting firm I worked for had over 70% of their revenue coming from two contracts, and neither contract used any of the tools or philosophies the consulting company claimed to espouse.
Ended up being the case that all the reasons I wanted to work there were just marketing messages and my sense of betrayal soured the relationship.
That the guy in charge of developers left about a year after we parted ways... every time I think about those people I wonder if he knew it was all bullshit or if he just got tired of dealing with attitude from stressed out developers and never understood why they were pushing back.
> The last consulting firm I worked for had over 70% of their revenue coming from two contracts, and neither contract used any of the tools or philosophies the consulting company claimed to espouse.
Assuming you're talking about philosophies that are considered good practice because they lead to more sustainable design practices and smoother development later, I have doubts those ever survive in long-term consulting contracts. The way pressure flows in those scenarios always leads towards emphasizing speed of development. Anything else requires multiple points in the management path both in the local firm and client firm to be willing to forego short term cost for potential long term gains, and if any one of them is out of alignment it causes problems.
If the client is not short-sighted they'll realize that asking to cut corners in the short term results in higher costs in the long term. But if they were this smart they might be doing the development inhouse in the first place. :)
The point is not that people don't want to encourage behavior that pays off in the end, it's that it takes alllinks in the chain to be vigilant about it to happen. Anywhere in the line between the the client company's CEO to the consultant company's developer if someone decides to cut corners because of time, cost or some other unknown reason, that will flow down through each subsequent level to the actual developers. There's probably five people in that chain minimum (including the developer, the client CEO, the consultancy CEO, and any managing coordinators), and any one of them can easily change this because of their own pressures. It's an inherently fragile system.
It's a much better situation that what happened to imagination Technologies, when Apple decided to in-source their video acceleration tech on the A-series CPUs. The company's share price dropped 70%.
It was a similar story back in the iPod days as well, Wolfson Microelectronics (coincidentally also a UK firm like Imagination Technologies) suffered similar problems when Apple massively reduced their orders.
See also PA Semi and Intrinsity from a decade back. Important, but small, suppliers who are picked up as asset buys and the talent become an internal team.
> They have a similar (but smaller) advantage in phones, though that is also due to a very large die size as they can afford to spend more per product.
Can Apple afford to spend more per product? There are plenty of other phones in the same price-bracket as the iPhone, and some like the Galaxy S-series phones surely have the volume, to justify a $10–20 increase in SoC cost to get competitive performance.
I expect a larger part of it is there's no justification for Qualcomm to develop such a SoC, because it already gets the sales.
Yes, because Apple has such a dialed-in phone manufacturing operation their gross margins are much higher than Samsung so they have more wiggle room on the core parts. Most estimates have Apple's gross margins on phones to be 1.5x-2x those of Samsung.
Yeah, Apple has sucked almost all the profit of the Smartphone sector for a long time.
It is just one thing: volume. Their volume is so great and prices so high that they get almost all the profit. Their volume also gives them terrible negotiation power with suppliers, they get the best there it is(like electronics), for cheap. The rest of the companies just fight for the spoils.
It's interesting that Apple now sells so many devices they're actually suffering from diseconomies of scale. It's hard to get high quality components produced at large scale in a useful timeframe.
Presumably they are looking at moving power management silicon in house as well to consolidate that advantage. At there scale, they will be getting custom silicon from Dialog already, but there's probably some comms/cost benefits to dealing with a department rather than an external company.
https://arstechnica.com/gadgets/2018/09/review-googles-wear-...