This week, Apple made a large step in their chip division. In the past Apple has used chips from Qualcomm because they are the only company that could produce the modems for 5G phones. Apple has repeatedly attempted to work with Intel to get cheaper prices, and from 2016-2019 Apple assisted Intel, but Intel stopped producing smartphone modems in 2019 after Qualcomm settled lawsuits with Apple and agreed to buy modem technology from Qualcomm.
On July 22nd, Apple reportedly ‘advanced’ talks to buy the entire division of Intel for over $1 billion dollars. Apple believes that their staff can produce a 5G modem without Qualcomm if they can use Intel’s patents, research and engineers. Qualcomm stock has dropped 3% due to these talks and Intel rose by 1%. Apple’s stock remains unchanged.
This acquisition would be one of the largest from Apple, as typically 15-20 small companies are acquired annually to integrate technology. The largest deal is the $3 billion acquisition of Beats in 2014.
Source: Wall Street Journal
Continued tariffs have had a large effect on Apple as parts of the Mac Pro would be heavily taxed. Apple Inc. has asked to exclude components that are used to product the Mac Pro from import tariffs after planning to re-locate production to China. Trump has threatened tariffs on billions of dollars of goods from China, so Apple is attempting to be excluded from these tariffs. In the past, Apple was not subject to taxes on products including Apple Watch and AirPods, so it may be possible that Apple slides by the tariffs.
Apple’s apps seem to appear first in the search results. This is raising concerns from developers and is being reported as unfair. Apple has denied this and says that the algorithm doesn’t give their own products an advantage. Apple’s apps have ranked more then 60% of basic searches. Developers contend that Apple is pinning their apps as the first to ensure that consumers see other apps as only alternatives. The reason that many people are upset is that rankings from search results in Apple store can make or break an app since searches lead to 65% of all app downloads. These kinds of issues have led to the heavyweight tech companies to be questioned by the House Judiciary Committee and antitrust issues. Continued need for regulations are coming and it will be an ongoing issue.
Lastly, on Monday Apple hired Tesla engineer Steve MacManus. He is at least the third engineering executive from Tesla. The design experience that Steve has may lead to different designs and a fresh creative perspective to the team. As the new IPhone and IWatch series are announced, the public will be able to see the differences made from new executives hired.
Apple report third-quarter results on July 30. For more information on Apple’s Earnings can be found on I Know First Apple Stock News here: