Apple surpasses HP as largest buyer of chips

June 8, 2011 By PETER SVENSSON , AP Technology Writer

(AP) -- Driven by the success of the iPhone and iPad, Apple Inc. has become the world's largest buyer of chips for computers and phones, a research firm said Wednesday.

Apple bought $17.5 billion worth of chips last year, surpassing computer maker Co. as the largest consumer, IHS iSuppli said. That was an increase of 80 percent from the year before, reflecting Apple's continuing sales surge.

An contains about $80 worth of chips, according to iSuppli. The chips include the central processor that acts as the brains of the device, radio chips that let it talk to cell towers and the audio chip that converts the owner's voice into a stream of data.

The finding that Apple is the No. 1 buyer cements its standing as a company that has the clout, and the cash, to buy chips and other crucial components such as touchscreens when other companies struggle because of supply constraints.

As an example, Apple said in January that it had spent $3.9 billion on long-term contracts to secure supplies for the next two years of a "very strategic" component it wouldn't name. Few other companies are able to commit that much money.

Last summer, high-tech manufacturers were scrambling to buy chips as sales started reviving after the recession and chip-makers had yet to ramp production back up. But Apple reported no chip supply problems; it blamed shortages of iPhones and iPads instead on limited assembly-line capacity.

IPhones and iPads use large amounts of expensive flash memory, accounting for much of Apple's chip consumption. Apple sold 48 million iPhones last year, up 89 percent from the previous year. Meanwhile, PC industry sales grew 14 percent, iSuppli said. IPads went on sale for the first time last year.

Samsung, Inc. and Corp. are leading makers of flash memory.

The $17.5 billion figure means more than a third of Apple's "cost of revenue" - expenditures excluding corporate overhead - went toward chip purchases last year.

Samsung Electronics Co., which makes a wide variety of electronics, and PC maker Dell Inc. were the No. 3 and 4 chip buyers. No. 5 is Nokia Corp., the world's largest maker of phones. However, its output is dominated by cheap phones that don't use as many or as pricey chips as the iPhone.

ISuppli expects Apple to extend its lead this year by buying chips for $22.4 billion, compared with $14.8 billion at HP.

Explore further: Apple Updates iMacs With Latest Chip (Update)

0 shares

Related Stories

Apple 'to design own computer chips'

April 30, 2009

Apple is building the capability to design its own computer chips in a strategic shift aimed at cutting its reliance on outside suppliers, The Wall Street Journal reported Thursday.

Analysts say Apple's iPhone 4 parts cost $187.51

June 29, 2010

(AP) -- Apple Inc.'s new iPhone 4 costs almost $20 more to make than its predecessor, the iPhone 3GS, but the device will still help the company continue to rack up high profits, the research group iSuppli said Monday.

Recession hits smart-phone makers in the chips

August 20, 2010

(AP) -- The seemingly recession-proof smart phone is suffering from a side effect of the rough economy: Manufacturers simply can't build enough of the gadgets because chip-makers that rolled back production last year are ...

As competitors pop up, iPad keeps price advantage

March 10, 2011

(AP) -- The new iPad model hitting stores Friday comes with several improvements over the original version but the same price tag, hobbling efforts by rivals at breaking Apple Inc.'s hold on the emerging market for tablet ...

Intel launches chip for tablet computers

April 11, 2011

Intel Corp. has launched a new chip for tablet computers, Atom processor Z670 based platform, as the world's most powerful semiconductor company aims to become a contender in the market for mobile chips.

Recommended for you

GPS tracking down to the centimeter

February 11, 2016

Researchers at the University of California, Riverside have developed a new, more computationally efficient way to process data from the Global Positioning System (GPS), to enhance location accuracy from the meter-level down ...

New computer vision algorithm predicts orientation of objects

February 11, 2016

Seen from any angle, a horse looks like a horse. But it doesn't look the same from every angle. Scientists at Disney Research have developed a method to help computer vision systems avoid the confusion associated with changes ...

Team first to solve well-known game theory scenario

February 11, 2016

A team of computer scientists from the University of Maryland, Stanford University and Microsoft Research is the first to solve a game theory scenario that has vexed researchers for nearly a century. The game, known as "Colonel ...

Record for fastest data rate set

February 11, 2016

A new record for the fastest ever data rate for digital information has been set by UCL researchers in the Optical Networks Group. They achieved a rate of 1.125 Tb/s as part of research on the capacity limits of optical transmission ...

1 comment

Adjust slider to filter visible comments by rank

Display comments: newest first

Vendicar_Decarian
not rated yet Jun 08, 2011
Not bad for a company that only employs 13,000 people. And another 13,000 retail staff world wide.

It is good that they layed off 25 percent of their workforce 3 years ago. They would only have been able to bank $59.5 billion rather than $60 billion if they hadn't done that.

Praise The Jobe. Praise the coming and going of him. Praise the adult iToys and video games he brings to his iUniverse.

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.