Apple pays chip architect Arm less than 30 cents in royalties for each chip it uses in Macs, iPhones, iPads, Apple TVs, Apple Watches, and HomePods.

Despite being one of its biggest and most important customers, Apple represents less than five percent of Arm’s annual revenue, with the company paying the least of any of Arm’s smartphone chip customers. Apple pays a flat fee of less than 30 cents in royalties for each chip used in its devices, regardless of how many cores it has.

SoftBank is the owner of Arm, and in 2017, the company’s CEO gathered Arm executives and explained that Apple pays more for the piece of plastic that used to be used to protect the screens of new iPhones than it does to license Arm’s intellectual property. SoftBank’s attempts to renegotiate Arm’s deal with Apple to raise royalty rates were apparently unsuccessful.

Arm was founded in November 1990 as Advanced RISC Machines Ltd and structured as a joint venture between Acorn Computers, Apple, and VLSI Technology. The late Apple VP Larry Tesler — the primary inventor of Cut, Copy, Paste — was a co-founder of the Arm joint venture.

Without Apple, there is no Arm. Apple today is merely benefitting from financially backing, creating, and contributing to Arm over decades of work.

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