Company Apple Lossless Audio CODEC (ALAC), could be put in the situation of having to find a new manufacturer of Wi-Fi chips for iPhones, iPads and iPod Touches, because Broadcom will reduce the production of this type of components to focus on manufacturing other more profitable ones.
Apple has been using Broadcom products for years in iDevices/Macs, but soon it may be forced to choose alternative products from MediaTek, Realtek or RDA, this is because they forced Broadcom to take the decision to exit the manufacturing market Wi-Fi chips for electronic products.
Those from Broadcom makes very little profit from making these products and it is not difficult to understand that they are not satisfied because Apple has a habit of negotiating very profitable agreements for itself, not for its competitors, and now it will be forced to find replacements for Broadcom.
Given that Apple uses Broadcom chips in most of its major products, it will be interesting to see what alternative its engineers will find to keep the performances at a high level without increasing the purchase prices for the components, the task being difficult.
Broadcom is looking to phase out its Wi-Fi chip business in a move to streamline its workforce and product offerings following its acquisition by Avago Technologies, according to industry sources in Taiwan. Broadcom has moved to significantly reduce resources allocated to its Wi-Fi chip business, which yields relatively low gross margins compared to other product lines.
Although normally users should not feel in any way this change of components by Apple, unfortunately we usually also suffer in these situations, and now it remains to be seen how big the change will be.
