Don't Look Past This Risky Bet Apple Is Making on Home-Grown Hardware
There's an undeniable upside to Apple (NASDAQ: AAPL) making its own hardware components found within its devices: control. Home-grown tech is guaranteed to work perfectly with the rest of its wares, and the company can develop software and hardware simultaneously. It's this prospect that made Apple's recent purchase of Intel's (NASDAQ: INTC) mobile modem business so compelling. The tech titan is now potentially even more self-reliant.
Except home-grown hardware isn't always all it's cracked up to be. Doing your own research and development (R&D) can get very expensive (and tricky), particularly if that sort of research isn't part of the company's normal course of business. Just ask Apple CEO Tim Cook, who spent several years refining the third-party supply chain he's now starting to displace.
It wasn't exactly a shock when Intel announced in early December that it had completed the sale of its smartphone modem business to Apple for a fairly modest $1 billion. The deal was forged and publicized back in July. Still, it's Apple's baby now -- for better and for worse. The "better" is absolute control of this aspect of its smartphones. The "worse" is the corresponding headache.
Source Fool.com
