Report: Apple Pays Less Than 30 Cents in Royalties to Arm Per Chip

Apple pays British chip architect Arm less than 30 cents per chip in royalties, The Information reports.

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Apple licenses the underlying technology used in the iPhone, iPad, Mac, Apple Watch, Apple TV, and HomePod from Arm. Despite being one of its biggest and most important customers, Apple represents less than five percent of Arm's annual revenue, with the company paying the least of any of Arm's smartphone chip customers. Apple pays a flat fee of less than 30 cents in royalties for each chip used in its devices, regardless of how many cores it has.

SoftBank is the owner of Arm, and in 2017, the company's CEO gathered Arm executives and explained that Apple pays more for the piece of plastic that used to be used to protect the screens of new iPhones than it does to license Arm's intellectual property. SoftBank's attempts to renegotiate Arm's deal with Apple to raise royalty rates were apparently unsuccessful.

While Apple is unlikely to sever its ties with Arm, the company has apparently explored the long-term possibility of using a competing open-source technology for its chips called RISC-V. Apple's current licensing agreement with Arm was signed in September and it "extends beyond 2040," but the chip architect is said to have continually attempted to renegotiate its financial terms.

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Top Rated Comments

Spaceboi Scaphandre Avatar
25 weeks ago
I mean is this even a surprise? Apple was one of the founding supporters of Arm so they're grandfathered in.
Score: 53 Votes (Like | Disagree)
till Avatar
25 weeks ago
It's a sweet deal for ARM, tens of millions of dollars every year just for providing an instruction set. Apple still does all the actual chip design themselves.
Score: 43 Votes (Like | Disagree)
snak-atak Avatar
25 weeks ago
Apple took a risk and invested heavily in the future of ARM years ago. Now it’s paying off, not just for Apple, but for ARM as well.
Score: 35 Votes (Like | Disagree)
iBluetooth Avatar
25 weeks ago
Note, that Apple is not using the ARM chip designs, only their ISA and develops its own chip designs. Thus, 30 cent per chip is reasonable for only the ISA.
Missing from the report is that ARM was established by Apple, Acorn Computers and smaller firm, so that Apple could license their ISA. Apple is a founder, but sold it's stake when it was almost bankrupt. Thus, Apple has a good deal with ARM, as it should.
Score: 34 Votes (Like | Disagree)
GeoStructural Avatar
25 weeks ago

Not surprising considering the long-lasting relationship Apple has with Arm to be honest - it was certainly beneficial to both parties in the past.
As far as I remember Apple was one of the founders of Arm, and recently the new push for it in commercial computers can be attributed to Apple as well, before these chips were used in low power devices, I see no problem with Apple reaping the benefits now.
Score: 30 Votes (Like | Disagree)
reden Avatar
25 weeks ago
Softbank is just butthurt they've lost so much money on other terrible investments, like WeWork.
Score: 30 Votes (Like | Disagree)