Nov 30, 2023 11:08:00

The license fee that Apple pays to Arm is the lowest price at less than 30 cents per chip

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iphonedigital

The SoC installed in Apple's devices is designed and developed based on Arm. Therefore, Apple pays a license fee to Arm to install SoC on iPhone and Mac, but it is reported that the royalty is less than 30 cents (about 45 yen) per chip.

How a Lopsided Apple Deal Got Under Arm's Skin — The Information
https://www.theinformation.com/articles/how-a-lopsided-apple-deal-got-under-arms-skin

Apple makes up less than 5% of Arm's revenue, and Arm can't do anything about it - 9to5Mac
https://9to5mac.com/2023/11/29/apple-arm-licensing-revenue/

Apple pays Arm less than 30 cents per chip in royalties, new report says | Tom's Hardware
https://www.tomshardware.com/news/apple-pays-arm-less-than-30-cents-per-chip-in-royalties-new-report-says

Apple uses the Arm architecture for the iPhone A series and the Mac M series, and it is no exaggeration to say that it almost relies on Arm for the development of its own devices. However, the revenue Arm receives from Apple is less than 5% of its annual revenue.

According to The Information, Apple pays less than 30 cents per device as a license fee for the chips installed in iPhones, iPads, Macs, and Apple Watches, which sell hundreds of millions of units annually. Typically, Arm sets a license fee of approximately 1-2% of the selling price of the chip sold. For example, the average price of Qualcomm's smartphone chips is about $ 40 (about 6000 yen), so the license fee is about 40 to 80 cents (about 60 to 120 yen), although it depends on the contract.

The A17 Pro chip installed in Apple's iPhone 15 Pro is reported to cost $ 130 (about 19,000 yen). If the license fee were 1 to 2% of this, it would be $1.3 to $2.6 (about 190 yen to 380 yen), but the actual license fee paid is 30 cents, so Apple pays it to Arm. You can see that the license fee is extremely low.

The Information says, ``At less than 30 cents per device, Apple's license fee is the lowest among Arm's customers.As a result, Arm's revenue from Apple remains less than 5% of its annual revenue. This is approximately half of our top two customers, Qualcomm and Mediatek.'

When Arm's parent company, SoftBank, acquired Arm in 2016, SoftBank CEO Masayoshi Son tried to review the contract with Apple and force an increase in license fees, but The Information reported that he failed. I am.

According to The Information, CEO Son called Apple CEO Tim Cook and told him that he would be increasing Arm's license fee. However, because the license agreement continued until 2028, Arm was unable to raise the license fee. Then, in September 2023, Arm announced that it had signed a ``long-term contract that will continue beyond 2040'' with Apple.

It turns out that Apple will continue to partner with Arm until 2040 and beyond, in application documents for a large IPO project worth 7.67 trillion yen - GIGAZINE

Although Apple has an unusual long-term contract with Arm, it is recruiting experts in RISC-V, a license-free architecture, as engineers, and The Information reports that Apple will continue to rely on the Arm architecture. I don't think they have any intention of doing so.