Apple has overtaken Hewlett-Packard Co. and Samsung Electronics Co. Ltd. to become the world’s largest semiconductor buyer according to iSuppli.
The research outfit indicates that original equipment maker (OEM) Apple bought $17.5 billion worth of semiconductors in 2010, up 79.6% from the comparably paltry $9.7 billion in 2009. This purchasing power was enough to catapult the Cupertino firm into the top spot in the Top 10 OEM semiconductor buyers. Apple was also the player with the sharpest increase on the list.
The fruit themed firm has clawed its way up from sixth position in 2008, to third in 2009 and finally first in 2010, thanks to high demand for its popular products.
Wenlie Ye, analyst for HIS notes that the firm’s achievement “was driven by the overwhelming success of its wireless products, namely the iPhone and the iPad.”
Both products, said Ye, “consume enormous quantities of NAND flash memory, which is also found in the Apple iPod. Because of this, Apple in 2010 was the world’s No. 1 purchaser of NAND flash.”
The firm is not expected to slow down its semiconductor spending any time soon and indeed, analysts believe the firm will now grow its gap over Hewlett-Packard, Samsung and other OEMs in 2011 and beyond.
For instance, in 2011, Apple’s semiconductor spending is expected to outpace Hewlett-Packard’s by $7.5 billion, up from $2.4 billion in 2010.
The growing gap is also rather indicative of how wireless products are faring versus PC equipment. Apple and HP had once both been rivals in the PC space, but today Apple has diversified its portfolio to include a rather more mobile and wireless portfolio.
The Cupertino company spent approximately 61% of its semiconductor budget in 2010 on wireless products like the iPhone and iPad. In contrast, 82% of Hewlett-Packard’s 2010 semiconductor spending was focused on computer products like desktops, notebooks and servers.
Apple certainly seems to have bet on the right horse, with smart phone shipments growing 62% last year, while tablets saw a whopping 900% growth rate, after the introduction of the iconic iPad.
Meanwhile, PC shipments have been dropping off, seeing just a 14.2% growth rate in 2010.
iSupply blames PC makers for not having created a strong enough ecosystem around their products to foster customer loyalty to their brand, whereas Apple has created a wealth and breadth of software and hardware that works well together, thus encouraging customers to stick with its products.
