Fast Company

Apple Buys The Future

Apple bought more semiconductors in 2010 than any of its peers, and the spread will be even larger in 2011. Semiconductors power chips. Chips power tech. Tech powers innovation. Innovation powers tomorrow. See where we're going here?

In 2010 Apple spent more bucks to buy more semiconductor hardware than its next biggest rivals in the computing and mobile tech world, including HP, Samsung, and Dell. In fact, Apple became the biggest buyer in the world among OEM firms. And it's likely to increase its buy 20% or more this year.

Big whoop, you say? Remember: Semiconductors are at the heart of chips. Chips power computers. Computers power lots of innovation. And innovation powers the future of business and everyday life. Fire up the old transitive property and...Apple's trying to buy the future of everything.

iSuppli's figures show that Apple lagged HP and Samsung in semiconductor spending in 2009--HP is one of, if not the world's biggest, seller of PCs, and Samsung sells just about every other kind of electronic gizmo, as well as computers. But in 2010, Apple ramped up its chip spending to $17.5 billion, up 80% from 2009--and $2.4 billion ahead of HP. In 2011, Apple's expected to extend this lead ahead of HP to $7.5 billion; spending by both HP and Samsung are expected to be flat.

Ow. Math hurts. So think on this: By aggressively expanding its purchase of chip hardware, well ahead of its peers, and probably enabled by its huge cash reserves, Apple is doing two things at once. It's going to make it trickier for its competition to access key bits of silicon-based hardware, worsening a situation we've already seen happen in the tablet and smartphone markets. There are only so many fab plants pushing this stuff out--particularly NAND Flash, which Apple's using inside its mobile devices and, increasingly, Macs.

Plus, it's ensuring its hardware is ubiquitous, in as many hands as swiftly as possible. We're not talking Macs here, though they are in the mix (and are now achieving more PC market share in enterprise than before). But primarily we're talking iPads and iPhones in the newly minted "post-PC" era. And it's not just private users--it's enterprise, too (because people are taking their shiny iPads into work and demanding they function on the network, because they're better than the old Dell machines running patched XP that sits on their desks). When companies that use Apple's hardware to power their executives' work think "We need to do [insert something clever] with our gadgets/research/customer interface," their next thought will be, "We need an iPad app to do that/help do that/find out if people want to do that."

Yes, there may be technically better hardware, or a more open platform. But Apple's user-friendly "It just works" schtick is real--and the average Joe looks for this sort of thing, along with future-facing high-tech-sounding stuff like iCloud. See how it fits together when you follow the money?

[Homepage image: Flickr user x-ray delta one; Top image: Flickr user chrisdejabet]

Chat about this news with Kit Eaton on Twitter and Fast Company too.

Read More: IBM Research: The Semiconductor Industry's Nanotechnology Can Be Nanomedicine

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2 Comments

  • Carlos serrano

    Oh come on! "Apple buys the Future"? Fast Company (online) used to be a good resource of news and articles. Now I feels like entering an Apple Store.

  • Matt Dana

    "Semiconductors power chips. Chips power tech. Tech powers innovation. Innovation powers tomorrow. See where we're going here?"

    A misleading and overblown conclusion?

    "Apple's trying to buy the future of everything."

    Thought so.