Confusion About Apple’s Relationship with Suppliers and Such

October 12th, 2017

Long-time Mac users understand that Apple has had a complicated relationship with some of its partners, most particularly Microsoft. Even though Microsoft has produced products for the Mac, the company remains Apple’s biggest rival in the personal computing space. At one time, Apple was engaged in litigation with Microsoft over claims that Windows basically ripped off the Mac.

After the “second coming” of Steve Jobs, Apple settled with Microsoft, received a $150 million investment in the company along with promises to continue to develop Office for Mac. While Windows dominance continues, Apple has trounced Microsoft in the mobile space. Office remains multiplatform, with versions available for Windows, macOS, iOS and Android. Windows Phone is essentially dead and, yes, the Surface PCs sort of compete with Macs, but the former hasn’t really delivered any great shakes in sales.

Overall, Apple and Microsoft continue to get along as “frenemies.”

While Apple has sued Samsung for stealing the designs and interface elements of the iPhone — and the legal actions are still going on — Samsung in turn sells such parts as memory chips and now OLED displays to Apple. These are multibillion dollar deals in fact.

And don’t forget which search engine remains the default on macOS and iOS gear.

Having competitors also do business with one another is not unique to the tech industry. Rival auto makers make deals to source components or jointly develop technology.  Higher volumes mean lower costs, and the individual companies can still compete with one another over individual products.

Most of you know this. That’s just business.

Well, except for a certain business publication that evidently hasn’t a clue of how such things work. So there’s a headline from Forbes that expresses this lack of vision, “Apple Shocker: It’s Using Chips Made By Frenemy Qualcomm In Apple Watch Series 3.”

That’s supposed to be shocking?

The story is dealt with as if it’s a revelation of something nobody knew, based on someone’s teardown of the new Apple Watch. Supposedly Apple was expected to use Intel cellular radios instead.

But that conclusion was never based on fact. Apple uses both Qualcomm and Intel modems on iPhones. Indeed, there are published reports that Apple needs to throttle performance from speeds of more than a gigabit on the Qualcomm parts to duplicate the lesser capabilities of Intel.

For the Apple Watch, the Qualcomm part reportedly provides better integration with Apple’s design, so the decision is apparently based on engineering needs.

Yes, Apple is still suing Qualcomm over supposedly exorbitant royalty rates for licensing its intellectual property. The legal skirmishes will go forward even as Qualcomm continues to earn boatloads of money from its Apple contracts.

That doesn’t mean that Apple plans to continue to buy such parts indefinitely. More and more custom silicon is being designed in house, and any company that cuts deals with Apple must realize it’s only temporary. Imagination Technologies was cut out of Apple’s supplier loop when the latter decided to design its own GPUs beginning with the iPhone 8. By the same token, Apple is reportedly designing its own modem hardware for iPhones, iPads and the Apple Watch, and the fruits of those designs may not take long to appear. Apple has also partnered in a proposed deal to acquire Toshiba’s chip business to ensure a steady supply.

What this means is that more and more of the components that make up an Apple gadget will be designed by Apple and built by one of its partners.

A singular exception, for now at least, is the Mac, which will continue to be powered by CPUs from Intel, and GPUs from Intel, AMD and NVIDIA. When I suggested on a recent episode of The Tech Night Owl LIVE that Apple might bring GPU development for Macs in house, I was quickly shot down. Developers have customized their apps, particularly games, to support the unique features of existing graphics hardware. Well, except for Metal 2 on Macs, which is an exclusive Apple feature.

But even if Apple does design at least some of the GPUs in Macs, that doesn’t mean that it’ll switch CPUs to its A-series ARM-based designs. While Apple doesn’t seem to mind moving low-level functions to an A-series system-on-chip, such as the Touch Bar on recent MacBook Pros, that doesn’t necessary presage a wholesale switch.

I have little doubt Apple could manage such a feat. It’s switched processors twice before. But Apple would again have to manage some sort of emulation or virtualization for existing Intel-based apps. And what about Boot Camp, which creates a native Windows environment on a Mac, or a virtual machine that allows you to run loads of operating systems and pretty decent speeds? Moving to ARM-based silicon would make that difficult or impossible to achieve with acceptable performance. Indeed, the ability to run multiple operating systems on Macs at close-to-native speeds helped power the switch to Intel.

That doesn’t believe Apple won’t move Macs some day. If Intel’s processor roadmap, which has slowed in recent years, doesn’t meet Apple’s needs, anything is possible.

Through it all, however, the fact that Apple continues to buy parts from a rival is nothing new or surprising to anyone who has been paying attention. Clearly that Forbes blogger is not one of those people.

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One Response to “Confusion About Apple’s Relationship with Suppliers and Such”

  1. Kaleberg says:

    A lot of people don’t realize that one can be a competitor or rival without being an enemy.

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