Apple’s 2010 chip purchases outstripped rivals

No doubt about it, Apple has undergone a spectacular transformation from underdog to industry top dog. Not only is it the second highest-valued company in the world; IHS iSuppli now reports that Apple was also the biggest buyer of semiconductor chips among the world’s hardware makers last year.

According to the market research firm, Apple’s semiconductor purchases totaled $17.5 billion in 2010, a 79.6% increase from the previous year, putting the company ahead of HP, Samsung, and Dell. This is no fluke, either. IHS iSuppli notes that Apple is exhibiting the "highest rate of increase among the world’s Top 10 OEM semiconductor buyers," and it expects the company to outspend HP by a whopping $7.5 billion this year.

Naturally, much of Apple’s semiconductor spending growth has to do with the runaway success of the iPhone and iPad. It’s worth pointing out that Mac sales are also nothing to scoff at, since their growth keeps outpacing the overall PC industry. AllThingsD reported earlier this week that Mac shipments have outgrown PC shipments for 19 consecutive quarters. (Apple’s share of the overall PC market is still a relatively small one, though.)

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    • jimmy900623
    • 9 years ago

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    • Anvil
    • 9 years ago

    Nothing to see here, just Apple being one step closer to taking over the world. :p

    • link626
    • 9 years ago

    everyone is going apple crazy

    • RhysAndrews
    • 9 years ago

    Kinda makes you sick, doesn’t it?

    • jcw122
    • 9 years ago

    It is not the second highest valued company in the world, only in the US stock market.

      • NeelyCam
      • 9 years ago

      Don’t you know whoever is the best in America is the best in the WORLD!

      Case in point: whoever will win the 2011 Stanley Cup will call themselves “World Champions”, while Finland is the actual 2011 World Champion.

        • indeego
        • 9 years ago

        Titan has a better hockey team in our Universe. Just you wait and see.

        • internetsandman
        • 9 years ago

        It’s baseball that holds that ignorance, not hockey. The “World Series” has only a few teams that aren’t American, and I can’t recall the last time any of them won it.

    • swaaye
    • 9 years ago

    They’ve certainly managed to win with the fickle masses. I wonder if that group mind will figure out some new megafads during this decade…

    • nagashi
    • 9 years ago

    This is why it will be harder and harder for people to claim Apple is overpriced. That kind of buying advantage means they’re getting MUCH better prices than rivals. Hence, very few companies have been able to offer up ipad competitors at cheaper prices. Generally they’ve been at BEST been able to match, transformer aside.

      • videobits
      • 9 years ago

      Uhhhh….what?
      Just because they get better pricing on components doesn’t necessarily mean they are passing that along to consumers. They could choose to do so, or not.

        • nagashi
        • 9 years ago

        My point is they don’t have to pass along any of that savings to consumers and they can still create cost-competitive products that don’t look at all overpriced compared to their competitors. They’ll keep their 30% margins while the ipad clones are lucky to get 5% with the same specs.

      • Farting Bob
      • 9 years ago

      ipads and iphones are very well priced. Macs and laptops are still overpriced, but not by as much as before, especially if you stick with the default config. Add an extra stick of RAM or bigger HDD though and expect to pay 400% premiums…

        • OneArmedScissor
        • 9 years ago

        I don’t know that Macs were ever really “overpriced.” They cost about as much as what similarly configured computers of any sort run.

        The problem is that they don’t let you buy a $400 Pentium model like everyone else, even though that’s all most of their customers need, and instead limit options to sometimes extremely strange and pointlessly expensive platforms. It’s the, “think different,” nonsense that throws their pricing out of whack.

          • nagashi
          • 9 years ago

          This is generally true, but Apple also has a habit of releasing very reasonably priced machines, and then not adjusting their prices for a year while competitors bring out products that sometimes exceed their value. See the mac pro line right now. They were a great deal a year ago, not so much now.

          Their laptop line tends to be a solid value any time of the year though, particularly given Apple’s unwillingness to shove 1366×768 panels into them (11″ air aside).

            • OneArmedScissor
            • 9 years ago

            “…Apple also has a habit of releasing very reasonably priced machines…”

            That is an opinion, and one not shared by most. While their prices may be “in line” with others, just the cost of entry for a Macbook is $1,000 – literally several times higher than every single other mainstream company. Even Sony has $500 laptops. Sony. I don’t know if I even see any other $1,000 laptops when I go into a Best Buy.

          • sschaem
          • 9 years ago

          I believe their profit on macpro is ~45%. Look at the 3500$ macpro with a radeon 5770.. Thats less then 1800$ in retail parts.
          And its still 1000$ over a better configured dell workstation. (exact same processor, twice the memory, etc..)

          • Farting Bob
          • 9 years ago

          Extremely expensive CPU’s, tonnes of RAM and a 3 generation old entry level GPU FTW!

      • designerfx
      • 9 years ago

      uh, you do realize that apple products do not even have a remote basis on reality when it comes to price, right? Their margins are astronomical. It’s incredibly easy for anyone to give much better prices, all they have to do is not aim for an apple profit margin.

        • TEAMSWITCHER
        • 9 years ago

        Reducing the price is the last bastion of a salesman. Apple could have started making PC clones years ago but didn’t see the point in joining an already over-crowded market. The competition has driven down prices but also features and design quality. By keeping the Mac a separate and unique computer system, Apple was able to market it as something better, and whether you like it or not, it worked brilliantly. Apple’s foray into the larger consumer electronic market (iPod, iPhone, iPad) has also been a huge success, creating more awareness of Apple’s brand, and a Halo effect for Mac sales.

      • indeego
      • 9 years ago

      They could in theory release tablets as loss leaders to get royalties on apps.

      Next step?
      Release “cheaper” or even “free” tablets but up their royalty percentage on software to 40-50%.

        • Firestarter
        • 9 years ago

        But would their products still be seen as premium products if they’re cheap? As it is now, I don’t think it’s sensible for Apple to release anything cheap.

          • sschaem
          • 9 years ago

          They can release an iPad Lite to grab to lower end market when they stop having manufacturing capacity problem.
          $500 is not affordable for most people, so I wouldn’t be surprise to see a $399 model be unveiled in the next 24 month.

        • sschaem
        • 9 years ago

        iOS developers paid Apple 1.2 billion so far in distribution rights.
        (The money developer must pay Apple to be allowed to sell their work to iOS owners.)

        Apple doesn’t see it that way. When you pay a developer for their work, you dont pay the developer.
        you pay Steve Jobs… and Steve after taking a third of the money send whats left to the developer.
        [url<]http://www.insidemobileapps.com/wp-content/uploads/25billion-paid-developers-500x332.jpg[/url<] Apple actually get 2% of its 2010 revenue, not from actual customers, but from this App developers tax. So lets look at how much Apple get in subsidies from its developers. Apple claim to have sold 200 million iOS device to date. So in perspective Apple get a 6$ subsidy from App developers per device so far. For a device lifetime this might amount to $18... (device kept for 6 years) The ipad cost Apple ~$250 , so I dont see how Apple can squeeze more money out of developers to subsidize the ipad at 100% But dont worry, apple squeze their developer by selling them high price mac they must use to write iOS apps. Plus the optional (but recommended) 100$ a yearly membership (its not enought that Apple gets 1.2 billion$ from them...) To be fair the membership use to be 500$ a year just not long ago. Anyways.... EDIT: The link might look like an egocentric joke about Steve but is not, its real and official, taken at a public Apple presentation done recently.

          • indeego
          • 9 years ago

          yeah you are probably right.

          A developer buddy of a friend of a pal just gets the cheapo mini and vnc’s into it. I say it this way because just revealing slight criticism about apple as a mac developer can be suicide.

            • sschaem
            • 9 years ago

            People that work close to Apple know its vindictive and evil company…
            (Wasn’t there a poll here not long ago that voted Apple as the most evil company?)

            But I can also attest that Microsoft doesn’t take constructive criticism well.

            • no51
            • 9 years ago

            Rush Limbaugh loves AAPL. That’s enough for me.

      • sschaem
      • 9 years ago

      Samsung can take care of that… Apple makes nothing. Samsung makes everything.

        • Farting Bob
        • 9 years ago

        Samsung will inherit the Earth, but everyone will think its Apple in power. Samsung seems quite happy to let this happen. If you can think of a product with a computer chip in it, chances are samsung made some money off it.

          • sschaem
          • 9 years ago

          True the reality is Apple just makes costly toys for grown ups, I dont think Samsung care unless they get bothered. (like apple last month trying to stop Samsung from selling phone and tablets… and samsung responding “what about all those patent you infringed on”)

          Speaking of this, I personally prefer the Samsung tablet design, well beside the screen format.

    • Firestarter
    • 9 years ago

    I wonder where Apple will be once the new fanboys get tired of their iThings.

      • derFunkenstein
      • 9 years ago

      Right now my iPod is kind of meh. Too small for serious web/email, mostly using it to play Words With Friends. Would kind of like a larger pocketable screen. Really intrigued by the idea of a 5″ or so Android tablet (so I can still play Words with Friends but then have a comfortable couch browsing machines).

      • PeterD
      • 9 years ago

      Steve Jobs might be dead by then, so we’ll never know whether it be because of fanboys tired of iThing, or company lacking vision.

        • mutarasector
        • 9 years ago

        It’ll be because the Job’s RDF will collapse allowing the fanbois to regain vision w/o the aid of fruity green tinted sunglasses.

      • DancinJack
      • 9 years ago

      /Funny

      There will always be “new fanboys” to buy the iThings. A lot of their products are among the best, or the best products in their respective categories for nearly all consumers. I have 0 Apple devices, but I have to admit they do seem to get it right sometimes.

        • Firestarter
        • 9 years ago

        They got it right lots of times so far. But what if the next big thing they introduce is a solid ‘meh’, not just for the tech enthusiast but for the public in general? Then they’ll have to fight just as hard for our dollars as today’s Samsungs, Nokia’s, Sony’s, Acer’s, etc. Whether or not they can survive in a market in which their products aren’t automatically seen as the ones to beat is yet to be seen.

          • Clutch Pedal
          • 9 years ago

          “Whether or not they can survive in a market in which their products aren’t automatically seen as the ones to beat is yet to be seen.”

          Power Mac G4 Cube. Original MacBook Air. Flower pot iMac. Anything from the 90’s.

            • derFunkenstein
            • 9 years ago

            I’ll give you the cube, but otherwise you’re dead wrong, at least in the second Jobs era (which is all that matters at this point). The late 90s started Apple’s huge growth with the original iMac and iBook. The iBook in particular was, mind-bogglingly, one of the cheapest laptops you could buy at the time, at $1100. The original MacBook Air was drooled over by lots of nerds, including some at this site. Most 13″ laptops are still slower than current set of Airs. The G4 iMacs were the first AIO machines with LCD screens and had it not been for LCD shortages, would have sold much better. The prices on these Macs actually went up $100 for a couple months when LCD prices spiked due to them being in such short supply.

            • Clutch Pedal
            • 9 years ago

            Whoops. Forgot about the late 90s. You are correct on that score. 🙂

            I stand by my views of the Flower Pot iMac and the original Air. The price of the original Air its Achilles’ heel.

            • Firestarter
            • 9 years ago

            Those were marketed to the ‘old’ Apple connoisseurs. Most people who buy iPads and iPhones today didn’t care for Macs in the 90’s and many still don’t care for today’s OS X products. What they do care about is having that shiny new thing everyone is talking about.

            What if the next shiny thing Apple introduces just isn’t as great as everyone had hoped? Will the people who were just recently introduced to Jobs’ RDF still buy it?

            • derFunkenstein
            • 9 years ago

            Most of the people iPhones and iPads are marketed towards either don’t remember Macs in the 90s or used them in grade school. /rimshot

            • End User
            • 9 years ago

            And you have the statistics to back up that statement?

            • BobbinThreadbare
            • 9 years ago

            Just look at number of Macs sold in the 90s and number of iPhones sold.

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