Why Apple Is Developing Its Own Chips

The video discusses Apple's strategic leverage over its suppliers, particularly in the semiconductor space, due to industry consolidation. Apple is developing its own chips to regain negotiating power, impacting suppliers like Imagination Technologies and Dialog Semiconductor. The reasons for Apple's in-house chip development include cost, quality, and timing, especially as they venture into new areas like augmented reality. Suppliers are advised to diversify, as seen with Qualcomm's deal with NXP, to reduce dependence on Apple.

Why does Apple prefer to have at least two suppliers for any given component?

• To ensure a backup in case one supplier fails

• To play them off against each other on price

• To speed up the production process

• To increase the quality of components

Which company was identified as losing Apple as a customer, causing its stock to fall significantly?

• Imagination Technologies

• Qualcomm

• Synaptics

• Dialog Semiconductor

What are the three reasons Apple is developing its own chips?

• Quality, speed, and market expansion

• Innovation, speed, and reliability

• Cost, quality, and timing

• Cost, innovation, and market control

What strategy did Qualcomm use to reduce its dependence on the smartphone industry?

• Acquisition of smaller smartphone companies

• Diversification into industrial and automotive applications

• Partnership with Apple for exclusive deals

• Increased production of smartphone chips

What is a potential consequence for suppliers overly reliant on Apple?

• Vulnerability to losing Apple as a customer

• Higher profit margins

• Increased market share

• Exclusive contracts with Apple