BLOOMBERG ESSAY insourcing the design of smartphone processor chips are

Bloomberg essay insourcing the design of smartphone

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BLOOMBERG ESSAY insourcing the design of smartphone processor chips are mentioned throughout the article as deductions made by the author and direct quotes from Johny Srouji; the Apple executive responsible for chip design and the focus of this article. The overall sentiment related to the advantages of insourcing chip design is one of differentiation and control. According to Johny Srouji, “The only way for Apple to really differentiate and deliver something truly unique and truly great, you have own your own silicon” (2016). Owning your own silicon as Srouji puts it refers to designing your own processor chips offers opportunities to ultimately control the performance of the smartphone. The performance of the smartphone and unique capabilities that are possible because of the fact that Apple controls their own silicon have established Apple as a leader in the smartphone market. Apple is second only to Samsung who coincidentally also insources the design of its smartphone processor chips[ CITATION Int15 \l 1033 ]. The similar processor design strategies evidences the validity and to a degree the effectiveness of owning your own silicon. Chip Advantage Lifespan The competitive advantage enjoyed by Apple resulting from the insourcing strategy is much like any competitive advantage in that it is temporary. It is common in a competitive market for a firm to create a competitive advantage through some innovation only to have competing firms duplicate the innovation, mitigating the competitive advantage. Of course the more difficult the innovation is to copy, the longer the resulting competitive advantage will last.
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