All Apple computers run on chips based on technology licensed from Arm. And it turns out the licensing fee is surprisingly low. Pennies per device.
Apple is one of Arm’s most important customers, and the two have a relationship that goes back to the early 1990s. That’s turned into a sweet deal for the iPhone-maker.
Apple gets Arm chip tech on the cheap
Apple designs its own processors, but those designs are based on ones created by Arm. The iPhone-maker needs to license the Arm architecture to keep making the chips that go into so many products: Mac, iPhone, iPad and more.
The cost for that is well below than many might expect. The licensing fee is less than 30 cents per device, according to The Information. That’s supposedly under what any other company pays to use Arm’s intellectual property.
Arm reportedly tried to increase the rate, but with no success. And the two companies recently signed an agreement that puts Arm-based processors in iPhone, Mac and other Apple computers beyond 2040, which could mean that low rate is locked in for decades to come.
Apple and Arm go way, way back
The Newton was Apple’s attempt to create an iPad a couple of decades earlier. The handheld device was so cutting edge it required a fast but low-power processor that didn’t exist yet. Cupertino teamed up with another company to found Arm and make that chip.
An article from deep in the the Cult of Mac archive shows how that investment in Arm saved Apple back in the 1990s. The Mac-maker sold its shares at a time when it desperately needed cash. The sale kept the company afloat until Steve Jobs could return to turn things around.
Apple is once again a part owner of Arm after it invested between $25 million and $100 million in the company when SoftBank put the chipmaker through an IPO in September, according to Reuters.
