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How long until Apple buys a panel maker so that they can vertically integrate every part ? This investment by google seems poised to if it goes well for google

How long until Apple buys a panel maker so that they can vertically integrate every part ? This investment by google seems poised to if it goes well for google to work closer so that they might acquire a piece .

xbmcuser 10y ago
Google are planning to go big with pixel devices current generation they had a lot of supply constraints and have been unable to meet the demand.
dba7dba 10y ago
What other part does Apple make?
- zitterbewegung 10y ago
  Apple has a bunch of internal SOC designs https://en.wikipedia.org/wiki/Apple_mobile_application_processors https://en.wikipedia.org/wiki/Apple_mobile_application_proce... (currently at least 16).
  - magila 10y ago
    Apple designs their own SoCs, but they do not manufacture the chips themselves. Fabrication is contracted out to Samsung and TSMC.
  - dba7dba 10y ago
    But designing and manufacturing are different.
tedd4u 10y ago
Great question. You may already know that Apple has a long history of locking up LCD production capacity. 'After Apple's Q1 earnings call in January, Apple COO Tim Cook told the press and analysts that the company had entered a $3.9 billion component supply deal in a key area that was "an absolutely fantastic use of Apple’s cash". Many speculated that, after flash storage supply deals and agreements, Apple identified high-resolution LCD displays as a key factor to iOS' devices manufacturing process. Back then, speculation and Tim Cook's own words suggested that Apple had entered a deal with three manufacturers, including Toshiba and Sharp. A month before the the Q1 financial results, Apple was indeed rumored to be discussing with Toshiba an investment in a new $1.19 billion factory -- the same that Nikkan Kogyo Shimbun is mentioning today. But at the same time, several reports suggested that Apple was also considering a second investment in a $1.2 billion facility from Sharp -- with over $60 billion in cash, a double investment in LCD manufacturing wouldn't have surprised anyone. But today's report seems to confirm that the deal with Sharp hasn't gone through, implying that Toshiba has been chosen as the only Japanese manufacturer of iPhone LCD screens.' From: https://www.macstories.net/news/apple-investing-in-toshibas-new-plant-for-iphone-displays/ https://www.macstories.net/news/apple-investing-in-toshibas-...
- npunt 10y ago
  Yep, and its not just LCDs, these deals happen with many of their suppliers. Business-wise its often much better to do so than buy them outright, because you avoid the risk of owning the wrong tech in a fast-changing technology environment. Just finance or invest in some facilities that make the parts you need now, and leave the long term business risk to the suppliers. Unless there's some groundbreaking tech that is a key differentiator for Apple (e.g. CPU/GPU), its better to NOT vertically integrate.
  - tedd4u 10y ago
    Best-in-class or near best displays are supporting and necessary but not sufficient for Apple. So acquisition doesn't make sense. The money is to guarantee supply for their huge product volumes and also sometimes a competitive measure to lock up supply so competitors can't get at it. On the other hand, I would not expect Apple to farm out their software, OS, marketing, industrial design any time soon. Unlike the supporting value of LCDs these are all differentiators.

xbmcuser 10y ago

Google are planning to go big with pixel devices current generation they had a lot of supply constraints and have been unable to meet the demand.

dba7dba 10y ago

What other part does Apple make?

zitterbewegung 10y ago
Apple has a bunch of internal SOC designs https://en.wikipedia.org/wiki/Apple_mobile_application_processors https://en.wikipedia.org/wiki/Apple_mobile_application_proce... (currently at least 16).
- magila 10y ago
  Apple designs their own SoCs, but they do not manufacture the chips themselves. Fabrication is contracted out to Samsung and TSMC.
- dba7dba 10y ago
  But designing and manufacturing are different.

tedd4u 10y ago

Great question. You may already know that Apple has a long history of locking up LCD production capacity. 'After Apple's Q1 earnings call in January, Apple COO Tim Cook told the press and analysts that the company had entered a $3.9 billion component supply deal in a key area that was "an absolutely fantastic use of Apple’s cash". Many speculated that, after flash storage supply deals and agreements, Apple identified high-resolution LCD displays as a key factor to iOS' devices manufacturing process. Back then, speculation and Tim Cook's own words suggested that Apple had entered a deal with three manufacturers, including Toshiba and Sharp. A month before the the Q1 financial results, Apple was indeed rumored to be discussing with Toshiba an investment in a new $1.19 billion factory -- the same that Nikkan Kogyo Shimbun is mentioning today. But at the same time, several reports suggested that Apple was also considering a second investment in a $1.2 billion facility from Sharp -- with over $60 billion in cash, a double investment in LCD manufacturing wouldn't have surprised anyone. But today's report seems to confirm that the deal with Sharp hasn't gone through, implying that Toshiba has been chosen as the only Japanese manufacturer of iPhone LCD screens.' From: https://www.macstories.net/news/apple-investing-in-toshibas-new-plant-for-iphone-displays/ https://www.macstories.net/news/apple-investing-in-toshibas-...

npunt 10y ago
Yep, and its not just LCDs, these deals happen with many of their suppliers. Business-wise its often much better to do so than buy them outright, because you avoid the risk of owning the wrong tech in a fast-changing technology environment. Just finance or invest in some facilities that make the parts you need now, and leave the long term business risk to the suppliers. Unless there's some groundbreaking tech that is a key differentiator for Apple (e.g. CPU/GPU), its better to NOT vertically integrate.
- tedd4u 10y ago
  Best-in-class or near best displays are supporting and necessary but not sufficient for Apple. So acquisition doesn't make sense. The money is to guarantee supply for their huge product volumes and also sometimes a competitive measure to lock up supply so competitors can't get at it. On the other hand, I would not expect Apple to farm out their software, OS, marketing, industrial design any time soon. Unlike the supporting value of LCDs these are all differentiators.