Apple Drops Intel for In-House Chips in Major Makeover of Mac Computers
The article talks about Apple’s plans to abandon outsourcing computer chips from Intel
and end a partnership of 15 years which started back in 2005. Apple said the transition from Intel
to its own processors would occur over the next two years, with the first Macs with customdesigned chips shipping by the end of 2020. in favor of more efficient integrated chips designed
by the silicon engineers. Besides, by doing that, Apple is taking a step towards tightening its
control over its products, software developers, and customer. Apple is planning to custom design
chips for Macs which will boost up battery life and allow faster processing speeds and more
security features. However, this move is not just about computing power, it is also about industry
power.
The article shed light on the core competencies that Apple possess that allow it to
produce computer chips by itself. In addition, we can conclude from the article what risks Apple
is avoiding by not outsourcing computer chips. I believe that when going through the article you
will be able to identify some of Apple’s core competences, resources, and capabilities, what we
learned in internal analysis. Apple’s main core competency is innovation. Making chips in-house
enables Apple to bring new features into chips and develop new designs to future Macs and
replacing third-party chips. Moving forward, when conducting a VRIO analysis, locating
resources and capabilities is easy. Apple’s resources and capabilities allows it to take advantage
of several external opportunities and to neutralize external threats. Its resources and capabilities
are rare and costly to imitate. Apple's organization is capable of exploiting the full competitive
potential of its resources and capabilities, they also have created a positive brand image with
positive company culture, and it is highly organized.
Throughout the article, the author, Tripp Mickle, dose not state his opinion word-to-word,
however, it is possible to see that he is all for the transformation from outsourcing to in-house.
He mentioned in several part of the article the numerous benefits that will rain on Apple when
the transition is done. I agree with what was mentioned in the article. Apple will gain a lot of
benefits from this transition, such as, cost savings. Apple also have gained the needed expertise
to make their own processors/ chips and have great marketing strategies. Also, like we learned in
VRIO analysis, I believe that having in-house manufactured chips in Macs will add more value
to the product. Furthermore, according to VRIO analysis, Apple’ popular global brand is by itself
a core competence that is valuable, rare, if not impossible then difficult to imitate and Apple
owns a pretty organized business which is a major competitive strength. Also, Apple is
constantly developing, and innovation is always present, both contribute to the success of the
business. As I mentioned before, Apple’s marketing strategies are powerful and effective. If
someone owns an iPhone, it is more likely to purchase a MacBook because of the compatibility
of the devices making it another one of Apple’s core competency.
Article Link:
https://www.wsj.com/articles/apple-expected-to-break-up-with-intel-transition-to-in-house-chips-formacs-11592844482?st=lh6osyu2fglki6j&reflink=desktopwebshare_permalink