Tim Cook leads Apple with a ruthless doctrine — and no one is safe from it, not even the company that put the 'silicon' in 'Silicon Valley' (AAPL, INTC)

Tim Cook in charge

  • Apple's said to be looking into technology that would allow it to stop buying laptop processors from Intel.
  • It's the latest sign Apple won't stop until it owns all of its core technology — something CEO Tim Cook vowed to do back in 2009. 

For nearly 50 years, Intel put the "Silicon" in "Silicon Valley." The massive chipmaker pretty much kickstarted the PC revolution with its powerful microprocessors and its collection of multi-billion dollar chip factories.

But the tech giant staggered precariously on Monday, losing billions of dollars in market value, because of a single news report that Apple might make its own processors instead of buying Intel's.

It's the latest, and perhaps most salient, reminder that any company that makes money from Apple one day, can easily become a victim of Apple the next day. 

The news about Intel, via a Bloomberg scoop, is that Apple plans to ditch the Intel processors that currently power its laptop and desktop computers. One advantage among many would be that future MacBooks wouldn't be held up by Intel's annual release cycle.  The switch isn't expected to happen until 2020, and to be sure, Apple only accounts for a small portion of Intel's total business. 

But it sent tremors that shook Intel's investors. 

Yet the news that Apple could one day build its own silicon microprocessors isn't a huge surprise, and it's even less surprising if you remember what Apple analysts and observers call the "Tim Cook Doctrine:" eventually, Apple is going to own all of the core technology that goes into its products. 

Apple CEO Tim Cook first laid out the credo in a 2009 quarterly earnings call, and he has repeated it in various versions in the years since. 

Here's the critical line, via analyst Horace Deidu

"We believe that we need to own and control the primary technologies behind the products we make, and participate only in markets where we can make a significant contribution."

And that's exactly what Apple has been doing — aggressively — in the 9 years since then.

  • First, it dumped the Samsung processors used by early iPhones. It replaced them with an Apple-designed chip, made possible by the purchase of PA Semi in 2008. Recent benchmarks suggest Apple's own mobile chips are starting to get as fast as Intel's desktop chips — and they're already more power efficient. 
  • Next, Apple bought Authentec, which gave it the core technology behind the Touch ID fingerprint sensor now found on nearly every major Apple product. It doesn't license someone else's fingerprint scanning tech like most Android phone makers do. 
  • In 2014, Apple introduced Swift, an open-source programming language optimized for Apple devices. 
  • More recently, Apple basically killed a British technology company best known for making the graphics processor Apple used in the iPhone. Imagination Technologies saw Apple poach its COO, then Apple told it that it wasn't going to use its graphics technology anymore. That caused Imagination's stock price to drop to bargain bin level, at which point a Chinese fund scooped it up.  
  • The bluetooth chip that Apple uses in its AirPods, Apple Watch, and Beats headphones, called W1, is an Apple design. Previously, Apple bought its bluetooth chips from Broadcom. 
  • More recently, Apple has been reported to be working on its own cellular modem. Apple used to buy the modems for its iPhone from Qualcomm, and eventually diversified and bought some from Intel as well. At some point, it's a safe bet that Apple build its own baseband chip — and ensuring that such a chip isn't hampered by Qualcomm's intellectual property may be what's driving a $1 billion lawsuit between the two companies. 
  • And most recently, Apple is rumored to be designing its own screens from end-to-end with next-generation technology, cutting components from companies like Samsung and LG out of this particular part of Apple's supply chain.

This is a clear pattern — and now the axe is hanging over Intel.

If the mighty Intel is at risk, then just about any company that makes money selling stuff to Apple should be be biting their nails right now — especially Apple's small suppliers. One day, Apple might tell you that it's making its own version of the widget you have sold it for years, and that its widget is way better than  yours — after all, with more than $200 billion in cash and securities, Apple basically has unlimited resources. 

It's easy to extrapolate the trend to any other core technologies that Apple may be using in its products. What's next for Apple? Server infrastructure? Metals and materials? Computer vision software

Whatever it is, if Apple's leadership thinks it's a core technology, it's a safe bet that it's eventually going to be handled in-house. No one can say they weren't warned.

SEE ALSO: Tim Cook and Mark Zuckerberg have been frenemies for years — and their cold war is heating up

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Contributer : Tech Insider https://ift.tt/2q1df6N
Tim Cook leads Apple with a ruthless doctrine — and no one is safe from it, not even the company that put the 'silicon' in 'Silicon Valley' (AAPL, INTC) Tim Cook leads Apple with a ruthless doctrine — and no one is safe from it, not even the company that put the 'silicon' in 'Silicon Valley' (AAPL, INTC) Reviewed by mimisabreena on Tuesday, April 03, 2018 Rating: 5

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