Companies like Google, Microsoft, and Amazon offer cloud-based services to a truckload of customers, including Apple, but the latter’s executives have always wanted to branch out and offer something similar to iPhone and Mac app developers, reducing dependency on other technology giants while also opening up another revenue stream. This business would function similarly to Amazon Web Services (AWS), but so far, there is no concrete timeline on when something like this would materialize.
Google and Amazon earn nearly $7 billion in revenue per year from cloud-based services by having Apple as their customer
The talks were held internally and were headed by Michael Abbott, according to sources close to The Information. Unfortunately, Abbott left the company in 2023, meaning that the discussions might not have been completely disseminated, but there is a high chance that the momentum was severely cut down. However, these talks carried on in the first half of 2024, but there is no update on the progress. One of the biggest differences of using Apple’s services is that the Cupertino firm will likely use its in-house silicon.
The company was previously said to be developing custom solutions that would leverage TSMC’s second-generation 3nm process, with mass production kicking off in 2025. The M5 will reportedly be introduced later this year, and with the Taiwanese semiconductor giant’s SoIC packaging, it could be an excellent fit for servers while delivering incredible performance and efficiency. Not only will these SoCs be cheaper for Apple to deploy its hardware for developers, but it can pocket billions in savings.
For instance, AppleInsider reports that the California-based titan spends around $7 billion annually using services from Amazon and Google, even if it is primarily for training its AI models. As of 2024, Google Cloud made up 12 percent of Alphabet’s total revenue, bringing in an impressive $43.2 billion. Looking at these numbers, it makes complete sense for Apple to reduce reliance on these companies and carve out its own path, but there is no telling when we will witness the first servers. For now, we will keep our fingers crossed and await more updates.
News Source: The Information
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