Apple is known for being a tough business partner with its vendors, and a new report suggesting the company has negotiated a surprisingly small royalty rate with Arm, whose tech Apple uses to make the processors in its many devices, confirms that.
According to a report from The Information, Apple is paying Arm "less than 30 cents per device" to use Arm-based chips in laptops, phones, tablets, watchers, smart speakers and other devices. This is reportedly the smallest royalty fee structure among the companies that use Arm's smartphone chip designs, adding up to less than 5% of Arm's sales. In comparison, that's about half of what Qualcomm and Mediatek — which the report says are Arm's two biggest customers — pay.
The article paints Arm (and parent company, SoftBank) as — unsurprisingly — annoyed by the arrangement. The Information reports that when SoftBank purchased Arm in 2016, CEO Masayoshi Son looked to restructure the deal and raise rates, but failed to do so.
Arm licenses chip designs to companies like Apple to design chips. Other companies may use Arm's chip designs wholesale, however. Arm originally started as a joint venture between multiple tech companies — of which Apple was a founding member.
