There are multiple instances when Apple has shown the way to the industry, with breakthrough innovation in business model and engineering. Challenging the status-quo is embedded in Apple’s culture. By launching iTunes in 2003, Apple created a new business model in music industry. The model was a win-win for all – music companies, customers, artists, and Apple, of course. Then, few years later, with the launch of exciting and appealing iPhone, Apple mostly killed the hegemony of Nokia in the mobile phone industry. The popularity and massive adoption of iPhone encouraged many other companies, existing and new ones, to join the smart phone revolution.
Coming to engineering innovation that also led a race among semiconductor firms, was the introduction of 64-bit smart phone SoC. After the announcement, many other companies followed the suite.
Currently, there is one more such radical change happening. With Apple moving away from Imagination’s GPU, and planning to build its own graphics chip, the former is creating a new trend in backward integration by OEMs. Currently, there are few OEMs, which design their own SoCs in-house, including Apple, Samsung, Xioami, and Huawei; all these companies take architectural license from ARM and design the SoC. Most of these SoCs use an ARM Mali GPU. It is still unclear on Apple’s intentions of moving away from PowerVR GPU. Is this a strategy to pull down the valuation of Imagination, making it an easy acquisition target? Or is this a move to further penetrate into backward integration by designing the GPU in-house? Whatever might be the case, Imagination may be the losing side.
Let us pick each of the options above and explore the effects of the same.
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