Apple Moving towards Customization

• Apple has recently seen a few interesting headlines, where they are potentially creating single chip combining cellular, Wi-Fi, and Bluetooth into one and working on their own displays for Apple Watch and iPhone.
• On a spectrum of products made of many parts, on one end are off-the-shelf parts, and on the other side is fully custom and vertically integrated parts.
• iPhones now come with a cacophony of different parts, where camera sensors are off-the-shelf from Sony, and the battery from a Chinese company called Amperex, and the chassis is customized, including the A16 Bionic, Taptic engine.
• The main advantage of having custom parts is optimization, resulting in better efficiency and improved performance.
• Now Apple is looking to go from their displays being slightly customized to being fully custom, so there is a move from OLED to microLED for their displays and watches.
• Apple is not a world-class manufacturer, but they are a world-class design firm, and they do research, design, and development of products, while the manufacturing is done by other companies.

Micro-LED Development & Manufacturing

• Apple is investing a significant amount of resources into developing and taking ownership of microLED technology.
• They plan to do all this development in-house and then provide instructions and design requirements to a third party to manufacture.
• This is different from Apple’s traditional practice of outsourcing and customizing existing designs from displays to radio chips.
• This decision to develop microLED has caused share prices to drop for some of Apple’s current suppliers.

Apple’s Radio Chip Investments

• Apple is also investing in a new chip design that combines multiple radio chips into one, with Wi-Fi, Bluetooth and Cellular communication all in one chip.
• This chip would allow for more efficient use of space and power in mobile phones, increasing the battery life of devices.
• Companies like Qualcomm, Broadcom and Samsung may need to shift production models and invest into developing new technologies of their own if they are to remain competitive in this market in the future.
• In the long run, Apple’s investments may result in better products, and other manufacturers may follow suit.