iPhones and iPads, the Largest Chip Buyers in 2010

People all overthe world are all crazy for their products like Iphones. Naturally, apple hassurpassed HP being the largest chip buyer in electronic field.It said that driven by the booming...

People all overthe world are all crazy for their products like Iphones. Naturally, apple hassurpassed HP being the largest chip buyer in electronic field.

It said that driven by the booming demand for the iPhone and iPad, AppleInc. has become the largest buyer of semiconductors among original equipmentmanufacturers (OEMs) for the ?rst time ever in 2010.

Lets see some data first. In 2010, apple bought Rs.78,125 crore worth ofsemiconductors, a 79.6 per cent increase from Rs.43,303.57 crore in 2009. Thisrepresented the highest rate of increase among the worlds Top 10 OEMsemiconductor buyers, allowing Apple to rise up two positions to take the no. 1rank in 2010. However, when looking back, in 2009 Apple was the third-largestsemiconductor purchaser, behind Hewlett-Packard Co. of the United States andSamsung Electronics Co. Ltd of South Korea while it was only sixth in 2008.

There are facts to explain this changing rank.

Firstly, Apple in 2010 was the worlds no. 1 purchaser of NAND flashbecause Apples surge to leadership insemiconductorspendingin 2010 was driven by the overwhelming success of its wireless products, namelythe iPhone and the iPad. These products consume enormous quantities of NANDflash memory, which is also found in the Apple iPod.

Although Apple and Hewlett-Packard have been rivals in the computer spacefor many years, an examination of their respective semiconductor expendituresshows that the two companies are fundamentally different.

Secondly, thanks to iPhones and iPads, Apple is more a maker of wirelessdevices than a computer manufacturer. The company spent approximately 61 percent of its semiconductor budget in 2010 on wireless products such as iPhonesand iPads. In contrast, 82 per cent of Hewlett-Packards 2010 semiconductorspending was dedicated to computer products like desktops, notebooks andservers.

Also, according to IHS, Apples strength in hardware sales lies in itsdevice and media ecosystemevery Apple product is connected through iTunes/iOSand is synergetic with all other Apple products. Through this common ecosystem,Apple leverages each device to sell other devices, with the rising device salesto consumers in turn leading to increased semiconductor purchasing by Apple.

According to IHS, Apple is likely to continue increasing its semiconductorspending during the coming years at an above-average pace, allowing the companyto extend its lead over Hewlett-Packard, Samsung and other OEMs in 2011 andbeyond.

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