Breaking the Mold: How Apple’s Custom-Designed Parts Could Revolutionize the Industry


Apple has been making headlines recently with reports that they are working on a single chip that would combine cellular, Wi-Fi, and Bluetooth into one for the iPhone, as well as their own displays for the Apple Watch and iPhone. To understand the significance of these developments, it is important to consider the scale of products that are made up of different parts, which ranges from off-the-shelf components to fully custom vertically integrated parts.

Most smartphones today use off-the-shelf components such as camera sensors from Sony and displays from Samsung and LG. Only the most specific parts of the phone, such as buttons and chassis, are typically custom-made. The iPhone currently uses a mix of both off-the-shelf and custom parts, such as off-the-shelf camera sensors from Sony, a customized battery from a Chinese company called Amperex, and fully customized A16 Bionic chips.

The advantage of using custom parts is optimization, as custom-designed parts can be more efficient and fit better within a product’s design. Apple’s recent move towards using custom-designed Apple Silicon chips in their computers has resulted in a significant improvement in speed, efficiency, and battery life.

The iPhone is Apple’s most significant product, generating most of the company’s revenue since its release in 2007. Thus, Apple’s move towards taking back parts of the iPhone is a supply chain optimization story that could result in significant benefits for the company.

There are two stories regarding Apple’s recent developments: the displays and the chips. Approximately 80% of iPhone displays are made by Samsung, with 12% made by LG Display and the remaining 8% made by others such as BOE Display. Apple currently goes to the display maker and provides specifications for the displays they need, such as curved edges and cutouts for their Dynamic Island feature. The manufacturer then fills the order using the displays they know how to make. Apple has handled sourcing displays so well that consumers do not notice any differences between displays from different manufacturers.

However, when Apple moves towards using their own displays, there may be some calibration work required, but the move could reduce their reliance on manufacturers and result in significant supply chain benefits.

Regarding the single chip that would combine cellular, Wi-Fi, and Bluetooth, this move would require Apple to work with modem makers and wireless carriers, but could ultimately result in a more efficient and optimized product.

In conclusion, Apple’s recent moves towards using custom-designed parts for their products could result in significant supply chain benefits and improve product performance. While there may be some challenges in transitioning towards using their own displays and single chips, the move could ultimately result in a more efficient and optimized product.

As a writer, I have a passion for exploring a variety of topics. When I'm not putting pen to paper, I enjoy traveling and spending time with my family. As a husband and father, I understand the importance of balance and finding time for the things I love. Whether I'm delving into new subjects or spending quality time with my loved ones.


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