Up high in the Apple ranks, the pursuit of growth follows the pursuit of power. With some analysts saying its best days are behind it, the company intends to rediscover growth and extend its reign over consumer products through the conquest of its suppliers. Intel? You’re up first!
In-house manufacturing would give Apple even more control over its destiny. It’s a bold ambition considering the hundreds of globally dispersed parts out there, but the company is serious about some of them. As Intel chases its 5G dream, a billion-dollar deal means it’s finally offloaded its chip business to Apple. Tim Cook’s company is getting tech secrets and tech talent bundled in, hoping to kit out future iPhones with homemade Apple iChips!
The worldwide effort to build an iPhone is worth a fair fortune, with many companies’ business prospects wholly reliant on it. Investors are noticing, however, that as Apple becomes more independent, its advantages widen. Able to supply chips, for example, is a competitive cost advantage that will mean fattened margins and more in shareholders pockets. The market is already putting numbers against Apple’s plans.
However, stock sellers on the other side of the wager argue this is all predicated on a false assumption. Namely, that Apple isn’t already at an advantage with its world-class supply chain, something only necessary to bridge Apple with the outside world of parts. When CEO Tim Cook arrived at Apple, his logistical genius preceded him. However, a supply chain is only as strong as its weakest link, and there’s always a risk of a link chaining down the stock.
And so, the decision is made, and there’s no going back! Cook has signed on the dotted line for Intel’s chip business, and now investors await the fruits.