Apple's Expansion in Munich: Developing Its Own Power Management Chips

Apple has been steadily expanding its operations in Munich, Germany, with a significant focus on engineering and research and development. This strategic move aligns with the city's reputation for technology and innovation, allowing Apple to harness local talent and collaborate with universities and research institutions. As part of its broader European expansion strategy, Apple is investing in its Munich office to enhance its capabilities.

Developing Power Management Chips

According to a report from German private bank Bankhaus Lampe, Apple is developing its own power management chips. This development suggests that the company is taking control over more aspects of its product supply chain, enhancing its control over the components of its iPhone and other devices as it prepares to face competition from rivals like Samsung Electronics and Xiaomi.

Reinforcing Apple's Position

The report from Bankhaus Lampe cites 16 different job openings on Apple’s website for analog/power management engineers at the design center in Munich, indicating a ramp-up in the company's RD efforts. Social network data from LinkedIn also supports this, as the report suggests that Apple has already recruited around 20 chip designers, many of whom have extensive experience in power management engineering.

The industrial sources in Taiwan suggest that Apple is already manufacturing samples of a power management integrated circuit. Analyst Karsten Iltgen predicts that this could potentially be applied in the iPhone as early as 2019.

Impact on Suppliers

The shift in power management chip development can be likened to what is happening with UK company Imagination Technologies Group. Imagination was recently informed by Apple about the cessation of using its intellectual property for graphics processing units (GPUs) in iPhones and other devices as Apple is developing its own independent graphics design. Imagination Tech has questioned Apple's ability to develop a GPU architecture without infringing on their intellectual property rights.

Strategic Advantage and Innovation

For Apple, developing power management chips represents a strategic move to greater control over the components of its products. This aligns with its broader strategy to innovate and enhance its devices’ performance. As Apple gears up for increased competition from tech giants like Samsung and Xiaomi, who are also rolling out their own processors, Apple needs to ensure it has control over critical components.

The Apple operation in Munich has reached a significant size, with an 80-person chip team potentially representing a significant threat to suppliers like Dialog Semiconductor. Analyst Karsten Iltgen believes that a complete shift to in-house development is unlikely in the short term, but the move indicates Apple's commitment to innovation and control over its technology stack.

In conclusion, Apple's expansion in Munich is not just about broadening its engineering capabilities; it's a strategic move to gain greater control over its product development. This development underscores Apple's continued commitment to innovation and its readiness to compete in a fiercely competitive market.