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

[Pezimak]

And as for those claiming Apple helped invent ARM no they didn't, they part founded the ARM company in 1990 but ARM dates back to 1978 and Acorn is the company under which it was invented and the first products using the tech launched as per Arms website:

The Official History of Arm

Arm’s journey to the world’s most pervasive compute platform covers a broad timeline of company milestones and product achievements.

newsroom.arm.com

I've personally always admired the idea behind ARM, seemed clever but everyone said it had limitations, well Apple seems to be blowing those limitations out of the water now and fully realising the inventions potential.

Cool video about it's origins:

 

[Pezimak]

And here's another thought for you, with Apples ARM plans now fully realised, they would have been developing them for years. So would have been both hilarious and utterly disastrous for Apple if the British government allowed Apples arch nemeses Nvidia to buy ARM.

 

[Motorola68000]

Now as far as an 8Gb base that I believe is untenable for future iPads, iMacs, MacBook etc., the story on ARM is a no story really. Its full of inaccuracies, inferring ARM makes the chips, etc. and where ARM has done very very nicely as a result of Apple's actions in the past and currently.

In all likelihood it also helped propel the price of the IPO.

Grandstanding by some at ARM.

Was always surprised Apple didn't buy out ARM, but then no doubt the EU and USA would have tried to block it.

 

[Motorola68000]

And as for those claiming Apple helped invent ARM no they didn't, they part founded the ARM company in 1990 but ARM dates back to 1978 and Acorn is the company under which it was invented and the first products using the tech launched as per Arms website:

The Official History of Arm

Arm’s journey to the world’s most pervasive compute platform covers a broad timeline of company milestones and product achievements.

newsroom.arm.com

I've personally always admired the idea behind ARM, seemed clever but everyone said it had limitations, well Apple seems to be blowing those limitations out of the water now and fully realising the inventions potential.

Cool video about it's origins:

Except of course Apple worked with Acorn way back in the 1980's and the two companies worked to create ARM. Indeed even the name ARM was derived from Acorn RISC Machine.

Apple entered into a joint venture with Acorn with Apple coughing up $3m, whereby ARM was founded. Acorn was 80% owned by Olivetti.

Apple recognised the benefit of RISC even then, and I believe Apple are still a major investor in ARM and which no doubt supported the IPO price.

 

[MacTiki]

Apple must have a master negotiator on the payroll. between this and the Apple card terms with Goldman.

Apparently Robert Johnson was not the only person who made a deal at “the crossroads”.

 

[MuppetGate]

Yes, what you said is true. However, ARM is still a business that needs to make money and grow. I assume they have investors who are putting pressure on them to do so. So in four years, expect that pressure to lead to an agreement much more favorable towards ARM than now. Apple will probably give in because as we just learned about Apple abandoning their modem endeavor, Apple is better off sticking to what works and the companies that make that possible.

Or in four years, Apple could switch their chips to their own homegrown instruction set and dump ARM altogether.

It really depends on the risk vs the reward.

And I’m not sure that the modem story is confirmed yet.

 

[Bonte]

In the meantime the customers who made Apple great again pay gazillions for their products and quality has been nothing to tall about.

Apple makes about 35% profit, it could lower the price with 15% and sacrifice 40% of its stock price. So you overpay maybe 15%, not that huge of a deal. Better buy some stock and keep paying the 15% mark up, that’s what I’m been doing.

 

[laptech]

And that people is how companies become billion/trillion dollar companies, by screwing over on others. It does not matter if Apple was a founder of ARM, they have royally screwed over ARM on the royalty deal they made.

 

[Pezimak]

Except of course Apple worked with Acorn way back in the 1980's and the two companies worked to create ARM. Indeed even the name ARM was derived from Acorn RISC Machine.

Apple entered into a joint venture with Acorn with Apple coughing up $3m, whereby ARM was founded. Acorn was 80% owned by Olivetti.

Apple recognised the benefit of RISC even then, and I believe Apple are still a major investor in ARM and which no doubt supported the IPO price.

No they did not create ARM, it was developed in the 70's. Apple did not invent it, that's wrong to make that claim. Does the official ARM website attribute its invention or creation to Apple? No it does not.

 

[applepotato666]

For the App Store, Apple also provides the dev tools (including simulators) and the infrastructure for distributing, updating, account management, billing, and more. It’s basically a free ride for Devs to use the App Store to generate revenue, with none of the store front / consumer facing technology to maintain an App Store as an extra cost. It’s all part of that 30% (or 15% for the smaller devs, or 0% for free, ad-supported apps).

I agree with you, that’s why I’m saying it’s a bit of a double standard. Apple paying 30 cents for being provided the tools to make their processors while taking much more from the developers they provide tools to. Still, the dynamic is different. Being a developer on the app store gives you exposure while Apple and the like are what give ARM popularity.

 

[GeoStructural]

Newton Messenger and eMate weren't low power devices?

Yes, as in hand-held/mobile devices versus workstations and laptops.

 

[ArtOfWarfare]

The Steam Deck is an AMD x86 device

My mistake. That's a bit surprising. The Steam Deck is running a variant of Debian 8, and Debian 8 supports running on arm64, so I just assumed the Steam Deck would be using that.

I suppose that'd have an issue that most games would need to be recompiled not only to support running on Linux, but also arm64. Looking right now... Unity appears to have just started supporting Linux on ARm64 within the past 15 months, but it looks like it's in a paid private preview right now, where you need to contact them and arrange a special support contract with them. Unreal... kind of looks like they only started supporting Linux on ARM64 within the past 15 months or so, too.

So with engine support so recently added, I guess it'll be 2-3 years before we start seeing a lot of games that can easily be ported to Linux on arm64... and then there will be a business question of whether it's worth it... could it make sense for something like the Steam Deck to actually contain both CPUs, and some kind of dual booting? IDK how expensive/complicated that would be... not sure how technically feasible it is... I think it's feasible to have both CPUs utilize all the same hardware? Do that for a generation then drop the AMD x64 CPU once enough games have switched to targeting ARM? Or is emulation like Apple did with Rosetta 2 easier?

 

[springsup]

I used to work at ARM. Employees used to joke that Apple basically just licenses the instruction set. Everything is custom.

And that’s the thing - Apple doesn’t need ARM, and both Apple and ARM are fully aware of that. Apple’s cores (heh) have long been designed in-house. If they wanted to, they would be more than capable of designing their own ISA, including implementing all of the tooling such as compilers.

The thing that Apple gets from ARM is that there is an IP covenant among ARM licensees for products which implement the ARM ISA. That’s a big deal for smaller companies, but Apple are so big and so old that have their own enormous IP portfolio, so they could secure licenses for any other IP they need.

That’s why Apple didn’t oppose when Nvidia tried to buy ARM. ARM is not a critical technology provider to Apple.

Having Apple in the ecosystem in some way is actually an asset for ARM. Apple contributes technical designs and IP, improves the tooling, and bolsters their credibility as a competitor to x86.

 

[Motorola68000]

No they did not create ARM, it was developed in the 70's. Apple did not invent it, that's wrong to make that claim. Does the official ARM website attribute its invention or creation to Apple? No it does not.

You need to check other sources, as I was party to it as Acorn was UK based. I certainly never suggested Apple invented it. But they were party to creating ARM the company. Olivetti was another party involved because of their Acorn interest. Ironically I've checked ARM website who confirm that Apple were party to the creation of ARM "which was a joint venture between Acorn Computers, Apple Computer (now Apple Inc.), and VLSI Technology (now NXP Semiconductors N.V)." It also confirms the Olivetti connection.

 

[Pezimak]

You need to check other sources, as I was party to it as Acorn was UK based. I certainly never suggested Apple invented it. But they were party to creating ARM the company. Olivetti was another party involved because of their Acorn interest. Ironically I've checked ARM website who confirm that Apple were party to the creation of ARM "which was a joint venture between Acorn Computers, Apple Computer (now Apple Inc.), and VLSI Technology (now NXP Semiconductors N.V)." It also confirms the Olivetti connection.

Sorry I misread your first post, I read it as to mean you were claiming Apple created the ARM chip itself. Not the ARM company.

 

[UK-MacAddict]

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

They are indeed. Europe are on the verge of forcing them to allow users to get apps from outside the App Store.

 

[PlaidHatter]

It is not.

Apple strives to make the world a better place through investing in technology, people and the environment. The more money Apple makes, the more the world benefits from its global leadership and incredible innovation.

This sounds like effective altruism, am I right?

 

[DeepIn2U]

Note, that Apple is not using the ARM chip designs, only their ISA and develops its own chip designs. Thus, 30 cent per chip is reasonable for only the ISA.
Missing from the report is that ARM was established by Apple, Acorn Computers and smaller firm, so that Apple could license their ISA. Apple is a founder, but sold it's stake when it was almost bankrupt. Thus, Apple has a good deal with ARM, as it should.

NOTE 2: Arm Holdings have NEVER MADE their own chips, not since Acorn.

 

[DeepIn2U]

Apple must have a master negotiator on the payroll. between this and the Apple card terms with Goldman.

This doesn't fall into the field of Payroll which is employee based or Succunded employees.

This falls into accounts payable but in a different area in the ledger

 

[DeepIn2U]

Apple sold their interest in ARM during their near death experience when they were scrounging through the sofa cushions for spare change. Although I like to think of “what if”, in reality that was a good decision.

Arm designs based on Risc architecture is just getting a second run now woth Apple's M series chips along now with Qualcomm's X Elite upcoming middle of 2024 for Windows pCs.

It's been a household name across the tech Industry since cellphones hit their second generation aka feature phones off SonyEricsson SEU running J2ME or Nokia's S40 also running on J2ME.

All smartphones used Arm architecture except the Intel XScale on PocketPc's back in the late 1990's to early 2000's - unless I'm mistaken on XScale which barely hit a dent for HTC smartphones when they stopped being on OEM to European carries.

 

[DeepIn2U]

> Apple represents less than five percent of Arm's annual revenue

Im sure ARM benefits from the marketing value from Apple’s muscular chips, which until the M series were considered basically embedded parts only.

i don’t think people really recognized how powerful phones were until Apple shipped laptops with ARM in them. That’s silly: the chips aren’t the same, being designed for different design points, so enthusiasts are overfitting in the opposite direction. But that’s how we humans work.

Oooih, wait until you see Pcs running analog chips to see the real power!

 

[4odomi]

Apple pays British chip architect Arm less than 30 cents per chip in royalties, The Information reports.

Apple licenses the underlying technology used in the iPhone, iPad, Mac, Apple Watch, Apple TV, and HomePod from Arm. Despite being one of its biggest and most important customers, Apple represents less than five percent of Arm's annual revenue, with the company paying the least of any of Arm's smartphone chip customers. Apple pays a flat fee of less than 30 cents in royalties for each chip used in its devices, regardless of how many cores it has.

SoftBank is the owner of Arm, and in 2017, the company's CEO gathered Arm executives and explained that Apple pays more for the piece of plastic that used to be used to protect the screens of new iPhones than it does to license Arm's intellectual property. SoftBank's attempts to renegotiate Arm's deal with Apple to raise royalty rates were apparently unsuccessful.

While Apple is unlikely to sever its ties with Arm, the company has apparently explored the long-term possibility of using a competing open-source technology for its chips called RISC-V. Apple's current licensing agreement with Arm was signed in September and it "extends beyond 2040," but the chip architect is said to have continually attempted to renegotiate its financial terms.

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

At least $30 mil annually then, for doing absolutely nothing 😳 Nice work if you can get it....

 

[california_kid]

So...........Apple isn't paying an ARM and a leg for this license................

....they really twisted their ARM to get this deal...........

..........Apple is winning the war and getting the ARMs for next nothing......

 

[bergert]

This one had me laugh out loud! No Apple were not the first with an ARM powered smart phone, not by several years actually, one example of many:

Ericsson - R380s

The R380 was announced in 1999 and was offered in three variants. The unit owned by the Mobile Phone Museum is the most common variant - the R380s - the...

www.mobilephonemuseum.com

The iPhone was just an evolution of years and years of smart phones. It wasn't the first ever one.
And the ARM tech was most certainly NOT made for the Newton 😂

When was ARM Holdings founded?

The company was founded in November 1990 as Advanced RISC Machines Ltd and structured as a joint venture between Acorn Computers, Apple, and VLSI Technology. Acorn provided 12 employees, VLSI provided tools, Apple provided a US$3 million investment (equivalent to $7 million in 2022).

[you are quoting a 1999 device]: Of course after the Newton flopped, ARM would sell to anybody who would be interested ... (INTEL including).

 

[iBluetooth]

NOTE 2: Arm Holdings have NEVER MADE their own chips, not since Acorn.

They make chip "designs" that many customers have bought the license for to use, but your right that they don't make their own chips for selling directly, but they make their own chips for testing.