Everything is confidential, but you can get an idea. Arm's revenue on a phone CPU likely pennies, or at the highest end a buck. They just make it up in volume. The interesting point is how.

First, you can see from a recent HN post that an electric toothbrush contains a 32-bit ARM CPU. If you've built any hardware you'll know that your BOM is king, and you try to squeeze that on the back of your OEMs. So Philips isn't paying much for that CPU and the CPU vendor (who could be Philips) would choose a different CPU if the royalty payment was too high.

By taking a tiny bite out of a huge number of parts ARM both spreads out its risk (the parts are ubiquitous) and starves the market of oxygen: there just isn't enough revenue for many or any competitors to get started. They'd have to lose money for years, or even decades, to get to the break even point.

And don't forget what ubiquity means: that phone doesn't have an ARM CPU: there is ARM logic in all sorts of devices inside the phone, from the baseband processor to probably integrated logic in the camera (even if the CPU has ISP logic) to USB PHYs to who knows what. With a few pennies or less on each one. Those headline CPUs may have the highest royalty rate for all we know.

The real question is why Apple uses ARM. Yes they have a longstanding history back to the founding of ARM but they are masters of cutting their BOM. They have an architectural license, and have their own microarchitecture. They make their own toolchain soup to nuts. They don't have to worry about compatibility with anyone outside their ecosystem. So why bother to pay anything to ARM?

I've been asking around and the best (and consensus) theory I've been able to get is patents. That architectural license would presumably contain rights to all of ARM's patents.

If that theory is correct, that's a huge threat to RISC V. I doubt ARM would ue, or even threaten to sue any RISC V user now: they'd look like Goliath beating up David. But once RISC V starts to get noticeable traction, and especially if ARM is a public company, patent licensing will start to matter. Their smartest strategy would be to pull a Microsoft and force companies to simply pay ARM a royalty for every RISC V they ship.

Note: I'm a fan of the RISC V and not particularly a fan of ARM. But I recognize that ARM has played the long game quite well.

This seems like a reasonable theory but I’m not sure the framing as ‘Arm pulling a Microsoft and forcing companies to pay for every RISC-V chip’ is quite right.

Apple has had access to all Arm’s IP - eg for example on big.LITTLE. Isn’t it right that Apple (market cap around $3tn) actually pays for that IP if they want to use it on another ISA?

Also maybe Apple has decided that Aarch64 is a better choice for their higher end CPUs and it’s worth the extra cost? That would surely outweigh any consideration in terms of cost given how small a part of the BOM this is.

> Apple has had access to all Arm’s IP - eg for example on big.LITTLE. Isn’t it right that Apple (market cap around $3tn) actually pays for that IP if they want to use it on another ISA?

Yes, this is my point: there’s little reason to change if you’d just have to keep paying the same.

> Also maybe Apple has decided that Aarch64 is a better choice…

Remember that Apple has a full architecture license and their microarchitecture is their own. Their parts don’t really look like anybody else’s except having mostly the same instruction set. I really don’t think the ISA itself would be anything they would spend any time thinking about either way — other factors dominate.

We're broadly in agreement - my concern was the implication that Apple can't switch because they'd be sued and therefore there is a wider concern for the broader RISC-V ecosystem.

Apple would deserve to be sued if they tried to take Arm's IP that they've had access to for years and apply it to another ISA for free. Doesn't have any read across for a RISC-V designer that doesn't have access to / isn't using that IP.

There are two questions here, not to be conflated:

1: given that apple has their own architecture that happens to implement some of the ARM ISAs, what are they really paying for with their license? The conjecture is: primarily patents. ARM supplies a lot of tooling but I doubt much of that is usable in Apple’s environment, except some of the most surface stuff (ISA conformance, perhaps). At this point I doubt there’s a lot of ARM IP in apple’s parts except for the copyrights on the ISA and patents, which anyone can read.

2: patents can apply to other MPU vendors/developers even if they don’t read them. In fact the “best” (i.e. most horrible) way to enforce them is to wait until vendor gets enough traction and then demand a license be purchased.

1. Maybe, although we don't really know and there is almost certainly stuff that Apple has access to which isn't patents - can they pick up the phone to someone at Arm to discuss and get help on an issue - very likely. Plus as I've said before those patents and associated IP might be integral to Apple's designs and they absolutely should pay for them.

2. Of course, that's just how patents work. But there is no evidence that Arm is doing this.

Overall, I don't agree with the sense that Arm is an overhead for Apple that if it weren't for those pesky patents they would cast aside and cut their costs. I think it's more complex than.

RISC-V has been specifically designed so that the ISA itself doesn't use anything that's recent enough to be possibly patent encumbered. There might be risk involved in some chip designs, but these can be seamlessly replaced if needed.

Indeed, I have assumed it's all in the implementation patents, but designing around them can be easier said than done.

>The real question is why Apple uses ARM.

The industry ( Smartphone ) uses ARM and that benefited Apple enormously. All the open source software that apple deploy and uses inside iOS as well as LLVM compiler tool chain. Apple benefited these R&D in value are being spent from Android as well. Instead of Apple being the sold owner and maintainer of its own ISA.

At the end of the day ISA doesn't really matter from Apple's POV. It make less sense now when Apple now has an array of their own ARM implementation to choose from. Since they dont need to pay per unit it makes very little sense to switch.

Unless you are into very specific usage.

Perhaps Apple chose arm because they wanted to own their processor now-with the plan being to move to a non-arm architecture in the coming years?

Apple has been an ARM licensee since they were a founding shareholder in ARM. They used it in the Newton, but now of course it's ubiquitous in their products.

The effort to design their own instruction set (including all the tooling) would not be trivial, but probably not enormous for them given their scale. And given their scale, their license must be cheaper than the cost of that activity, because you know Cook would pay it if it would save them enough down the road.

Apple has deep pockets, but using an existing ISA gives you a lot of OSS porting and optimization work for free. They could just use RISC-V if they wanted to and still have all the flexibility they want.

Given the amount of software they write from scratch, and that they have their own tool chains, the actual ISA is below Apple’s noise floor. I’m sure they spend more on optimizing for the quirks (cache size, instruction timing, etc) of each generation of chip.

Not easily as their terms are private, but you can tell it's not a huge slice. Fairly well every phone and all manner of other devices uses an ARM but I'm googling their royalty revenues at $1.3 billion dollars annually. So that's not much per device shipped. Stuff you hear suggests maybe they get 1% on the sale price of a CPU. Note that's the CPU price, not the phone. The CPU in a phone might cost e.g. $20 so they maybe get 20 cents off that. I expect they have other revenues from design assistance and support etc but those costs would apply to a RISC-V device also.

I remember few years back ARM's CEO was giving presentation at AMD conference, and he explained ARM's strategy as such: Rather that taking a bigger slice of a smaller pie, we take a smaller piece of a very large pie.

A high end Snapdragon CPU is maybe 70$. It's unlikely they're making more than a dollar or two on a 1000$ phone.