Report: Apple Pays Less Than 30 Cents in Royalties to Arm Per Chip

[Bodhitree]

Thirty cents is certainly better for Apple than what they used to pay Intel.

 

[Biro]

I mean is this even a surprise? Apple was one of the founding supporters of Arm so they're grandfathered in.

Exactly. The article is a great example of how everything it says is a fact - and yet is highly misleading. It sounds like the author doesn’t have enough background.

 

[drrich2]

The missing piece here is why Apple would agree to 'renegotiate,' since they have a good fixed price on access to what they need for a long time to come. If ARM wants Apple to pay more, ARM's motivation is obvious, but why would Apple agree to that? What did ARM propose to offer?

 

[ThomasJL]

It's great to see that Tim Cook passes such savings on to customers. Oh wait... 😄

 

[Biro]

So you're making the case that I am the owner of Apple because I have some Apple shares, just as Softbank is the owner of ARM because they have some ARM shares?

Yes… you are AN owner of Apple because you own some shares. Which is why shareholders, if enough get together, can fire corporate officers.

 

[TheMacPotato]

All good for Apple, have to pay far less than they had to pay to Intel the costs of ARM based chips are so much cheaper for them to manufacture and they can charge more to Mac customers and less to ARM.

 

[Ethosik]

LOL, and they take 30% from developers selling on the App store. This company is the pinnacle of GREED.

Different divisions and budgeting and employee costs. Chip manufacturing doesn’t have as many employees compared to every customer service rep on payroll combined that takes billing issue or support calls installing apps. I called them a few times about other developer’s App issues.

 

[netdudeuk]

Does nobody know the history of ARM

Obviously more than some on here.

The processor was designed by the team at Acorn Computer, creator of the BBC Micro and the Acorn Archimedes. The latter was built around their Acorn RISC Machine processor. I believe that Sophie Wilson was mostly the genius behind it. It was not built for Apple.

 

[foliovision]

I suppose if you had a cell phone plan or cable subscription that grandfathered you in at a low cost and the provider wanted to renegotiate with you to have you pay more, that you would promptly agree because you are NOT greedy?

Poor example. I've had two such contracts and in both cases the cell phone provider squirmed out of the contract, looking for the first excuse to cancel the contract. They weren't even shy about it – "you didn't want to change contracts, so we'll cancel this one".

Apple risks a lot of grief from partners if it refuses to recognise inflation and tries to squeeze every cent out of the suppliers in a time of enormous prosperity for Apple.

Stealing €4 billion of EU tax money still has many of us considering how little Apple we can use, and how to return the favour to Apple. It's not fashionable in the Greedy Twenties, but don't underestimate the power of good vibes and happy partners.

 

[CapitalIdea]

LOL, and they take 30% from developers selling on the App store. This company is the pinnacle of GREED.

Apple is not a nonprofit and you are not entitled to anything for free, period.

 

[progx]

LOL, and they take 30% from developers selling on the App store. This company is the pinnacle of GREED.

I guess Valve, Google, Microsoft and any other company that has an App Store with 30% cuts is the same too

 

[bumblebritches5]

This is why apple will not be switching to risc-v, they would save almost nothing in license fees and cost billions software development.

Not doing that currently, there’s no reason they couldn’t or wouldn’t in 15 years.

 

[MasterControlProgram]

Also, there's the Nintendo Switch, Nvidea Shield, and Steam Deck demonstrating that ARM is far more capable than its typical use in embedded systems suggests.

The Steam Deck is an AMD x86 device, but you’re absolutely right about the benefits ARM has brought to lots of different types of devices.

 

[bumblebritches5]

This argument is so old. Yes, I agree, too, that the percentage should -now- be lower, but what they are doing is not "wrong". 30% is the standard retail markup. Walk into any store and items on the shelf have been marked up 30-70%.

One needs to look at the massive value that Apple is giving to developers.

I say they should make the markup be 1/8th (12.5% for the metric users) and call it a day.

 

[bumblebritches5]

This is a problem for ARM. If they get too greedy peope wil move to RISC-V. Would Apple change CPUs again? RISC-V is open source and anyone can use it for free. That would save Apple the 30 cents they pay but change is very disruptive. I doubt they would.

That said, risc-v could be used in chips that are not user-facing, like inside of cables and keyborads and trackpads and monitors. A typical home computer has MANY small microcontrollers, not just the man CPU.

I heard a rumor Apple already is using RISC-V for microcontrollers.

 

[skc176]

ARM was created to power the Newton. The Newton failed, and Apple was a brink of bancrupcy. Apple came back very strong with the iPhone, they invented the smartphone powered by ARM before anybody else. There were all kind of competing processors: Intel Mobile (Windows phone), Intel Xscale (Palm), MIPS, Marvell (Blackberry).

Urgent need to re-evaluate a license?

No it wasn't. Created by a British computer company called Acorn. The A in ARM stands for Acorn (or it used to), R for Risk, M for Machine. Acorn were commissioned to create the BBC Micro by the BBC back in the early 80s. They also made the Acorn Electron and Acorn Atom. They then made their very own RISK chip which eventually became ARM and put it their own computer. They were way ahead of their time.

I think I'm correct in most of the details, I haven't looked it up - just from memory.

 

[victorvictoria]

Bully for Apple. Business is business. And business is for profit, not philanthropy.

 

[So@So@So]

Well, to me 30 cents seems to be very low, but if it has been negotiated it would be illusional to hope that Apple would be paying more.

 

[hoodafoo]

30¢ x 1B is equal to $300M - nothing to sneeze at!

 

[hoodafoo]

oh, but wait, it's not just Macs that use ARM, it's iPad, iPhones, AppleTV and everything else they sell

 

[Mr. Dee]

The shares are doing well, bought in at 55 and its now at 62, will be in it for the long term.
I see vast majority of the PC vendors switching over to ARM based chips. I won't count out Intel, since they are bringing a lot of fabs online using the Chips Act money which will used to fabricate a lot of these chips for new devices running Windows 12.

 

[itti]

Arm just provides the standards. All the design and implementation were done by apple itself. Arm should feel proud and grateful that Apple follows their standard instead of a competitive open-source version.

 

[cocky jeremy]

This argument is so old. Yes, I agree, too, that the percentage should -now- be lower, but what they are doing is not "wrong". 30% is the standard retail markup. Walk into any store and items on the shelf have been marked up 30-70%.

One needs to look at the massive value that Apple is giving to developers.

Yup. Where I work, we won't touch anything under 30%. Not worth the time.

 

[drrich2]

Apple risks a lot of grief from partners if it refuses to recognise inflation and tries to squeeze every cent out of the suppliers in a time of enormous prosperity for Apple.

If they're using intellectual property under contract but not receiving physical goods, doesn't sound like squeezing a supplier. I imagine the royalty payments add up, considering Apple's business.

Stealing €4 billion of EU tax money

Haven't heard of Apple stealing. Making efforts to reduce tax burden that Apples claims is legit and that some in the E.U. disagree about (and court findings have gone back and forth). Corporations, like individuals, often try to minimize tax burden as best they can, and sometimes the government disagrees and things to go court. It's not clear that's 'stealing.'

 

[jlc1978]

Once again: A brick and mortar store has anywhere between 2% to 1000%+ mark up on items. Most online stores charge around the same. I think someone said, Amazon takes ~40%.

So please stop beating this dead horse. It is dead, smashed and long gone. No argument against Apple’s 15-30% commission has any ground to stand on when compared to the rest of retail market.

Or when compared to how it used to be with developer getting 30% if they were lucky and having to upfront all the associated costs before seeing any money.