Report: Apple Pays Less Than 30 Cents in Royalties to Arm Per Chip
Apple pays British chip architect Arm less than 30 cents per chip in royalties, The Information reports. Apple licenses the underlying technology...
So… for every 10 million devices Apple sells, ARM makes $3m? Last year Apple sold 232.2 million iPhones, 60.4 million iPads, and I can’t find a statistic for Mac sales in 2022 only 7 million in a particular quarter, so maybe 21-30 million. We’ll say 30.
That’s ~320 million devices at 30¢ each (and doesn’t include AirPods, Apple TVs, Watches, HomePods, or any other ARM based device Apple sells). That’s $96m dollars for the license to an instruction set Apple helped create, used for chips Apple designed, and that Apple pays to have fabricated.
Nearly $100m a year on three product lines that don’t use ARM Holdings’ cores, or require ARM’s involvement in engineering or manufacturing, only the instruction set seems fair to me.
When you put it that way, Apple may be getting ripped off!
Reminder: Apple is not buying the chips from ARM. They are licensing the IP, and using it as a basis to create their own designs, then paying someone else (TSMC) to have them manufactured.
I’m not sure this is such a bad deal for ARM. There are no per-unit costs for them here.
Ignoring that Apple's chips as laptop flagships have pretty much singlehandedly changed the perception on their viability for actual computers, how much of ARM's work are they actually using?
They design their own chips that are meaningfully ahead of ARM's. I understand that their contract allows them pretty broad access to IP, but are we sure they'd be that much worse off (especially compared to ARM) if this deal wasn't signed and Apple put the investment into a different instruction set?
Hell, they built most of the smartphone and tablet market. Are we sure ARM would even be relevant without Apple's weight?
how much of ARM's work are they actually using?
Apple doesn't use Arm's designs for their chips. They have a license to the Instruction Set Architecture (ISA) and use that to make their own designs.
My understanding was that their right are pretty broad and that they could basically use official designs, fully custom designs, or anything in between.
My question is whether they adopt any design elements from ARM (whether modified or not) or if it's completely an implementation of the instruction set from scratch.
They agreed to this deal. What’s the news?
RISC-V is within the next decade anyway
Sounds like Apple got a pretty good deal. I wonder what other manufacturers pay for the licensing fees.
They always get a “pretty good deal.” Goes far back as the iPod when Apple was changing the entire face of music. Same with the Apple Card and the banks they use.
It’s almost like Apple hires competent negotiators while everyone else is like so wErE dO I SIgN hue dur.
Case in point: https://9to5mac.com/2023/11/29/apple-arm-licensing-revenue/
Doesn’t it have more to do with their seize and loyal userbase?
Most manufacturers don’t license the instruction set, only the Cortex core designs. Those licensing fees are actually lower than the instruction set.