https://9to5mac.com/2023/11/29/apple-arm-licensing-revenue/

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  * iPhone
  * Arm

Apple makes up less than 5% of Arm's revenue, and Arm can't do
anything about it

Avatar for Zac Hall Zac Hall | Nov 29 2023 - 7:21 am PT
15 Comments
[apple-arm]

Despite Apple's reliance on Arm as the instruction set for iPhone
chips, Arm earns less than 5% of its annual revenue from Apple. A new
report details how this has been a heated point for Arm, especially
now that the company is publicly traded and looking for growth.
However, Softbank CEO Masayoshi Son has proved unsuccessful at
forcing Apple to pay more in licensing fees.

[INS::INS]

Specifically, Apple pays Arm "less than 30 cents per device for the
right to use Arm-based chips in the hundreds of millions of iPhones,
iPads, Macs and Apple Watches it sells each year," The Information 
reveals.

    That's the lowest royalty rate among Arm's smartphone chip
    customers, traditionally its biggest group of customers by
    revenue, the people said. As a result, Apple accounts for less
    than 5% of Arm's sales, around half the figure for each of the
    chip company's top two customers, Qualcomm and Mediatek, they
    said.

And while Apple and Arm have a multi-decade long licensing agreement,
The Information does mention that Apple has at least considered life
after Arm:

    In the meantime, Apple has explored the long-term possibility of
    using a competing technology in the chips for its devices,
    according to one former Apple employee. The loss of Apple would
    be a major blow to Arm.

That's likely a reference to the license-free RISC-V technology,
which would require a decade or so of work for Apple before being a
viable alternative.

What's also apparent in the report is that SoftBank CEO Masayoshi Son
really wants Apple to pay Arm more, but Arm really doesn't have any
leverage.

    At one point, Son called Apple CEO Tim Cook to tell him Arm would
    be raising prices for all its major smartphone and chip
    customers. Cook's team reassured him that Arm couldn't raise
    fees, because the companies' contract at the time lasted through
    2028. Son backed off. Since then, Apple and Arm have been through
    several rounds of negotiations that have kept the financial terms
    of Apple's deal largely in place, people familiar with the matter
    said.

Check out the full report at The Information.

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Guides

 
iPhone

iPhone

Introduced in 2007 by Steve Jobs, iPhone is Appl...

 
Arm

Arm

Author

Avatar for Zac Hall Zac Hall apollozac

Zac covers Apple news, hosts the 9to5Mac Happy Hour podcast, and
created SpaceExplored.com.