What drives Apple to make its own components instead of buying them on the market? That’s the question an analyst asked last night at Apple’s financial results conference. The question is very topical, when we find an Apple in the middle of the biggest architectural transition in its history.
The difference between buying or making something for Apple
Harsh Kumar is CEO of investment bank Citi, also known as Citigroup. This analyst attended Apple’s shareholders conference, which is still held by phone. At question time, Kumar wanted to know “how Apple determines what is strategic and what brings Apple to do it itself and what is not”. The answer came from Cook himself:
The way we decide to do [los chips]We wonder if we can do better, if we can deliver a better product, if we can buy something from the market. And that’s great, if it’s as good as we could possibly make, we’ll buy it. We will only enter where we believe we have the capacity to do something better and therefore create a better product for the user.
Cook’s claim implies that Intel processors no longer served their purpose, with Apple Silicon superior in all respects
Cook continues to give the example of the M1 chip. He explains how they created a chip that was superior to what they could buy on the market, with clear reference to Intel. And how they combined their hardware and software expertise to create the M1. For the executive, the market response, despite the supply restrictions, has been “unbelievable”.
For Apple, launching its own chips was a strategic decision made a decade ago. One that continues to bear fruit many years later, differentiating its products from others and becoming independent from suppliers with agendas, interests, priorities and roadmaps that don’t always coincide with Apple.