Don't Apple's A7 and other chips count as "developing silicon"? And you don't see Apple focusing on "developing software"?
The A7 is a marvelous chip, but the reason these super smartphones exist is silicon manufacturing prowess. If we could not make these chips smaller and less power hungry, the mobile revolution would not have happened. Apple stood on the shoulders of giants who went before them in this regard.
Intel, IBM, TSMC, et al, plow a lot of money into advancing silicon manufacturing further. Lots of other companies plow billions into tools to support this sector.
In some ways, taking in huge margins on silicon upstream (while the downstream players are squeezed to minimize their margins), without plowing money back into the system, could be seen as somewhat parasitical.
I used to work at IBM Research, and one of the things I used to love doing was reading IBM Systems Journal. Research, like on scanning electron microscopes, measuring quantized magnetic flux in superconducting circuits, new kinds of giant magneto resistive effects, it was all very exciting to know that right down the hall, stuff I'd normally read about in Scientific American, Nature, or other places was being done. IBM T.J. Watson Research was given relative autonomy when I was there, they could spend money without have to justify it as being linked to a product, and I think that was very valuable for long term development.
The new players in Silicon Valley don't seem to have the same commitment to basic R&D, long term R&D. Everything has to be linked to something shiny that can be sold in 2-3 years.
But no matter how you slice it, these downstream suppliers are doing more with less. They have much smaller margins, fund more important R&D which benefits the entire ecosystem, which takes up a much larger percentage of their overall revenues.
The marginal utility of an extra dollar in Apple's cash reserves seems less useful or effective than the marginal utility of a dollar in say, TSMC's coffers.
Apple designed the A7 themselves. It happens to implement the ARM instructions, but is not an ARM design. The only other player I can think of currently with this in the wild is Qualcomm, and this is one reason Apple and Qualcomm chips maintain a performance edge over other ARM CPUs.
The rest of the processor industry, including the ARM ecosystem where some people get to compete with ARM themselves, is making a lot of progress in working out how to improve the layout of the transistors, such that two designs on the same process can perform quite differently. In the case of the Ax devices and the Krait this is a surprisingly significant margin, and they tend to be at least a whole generation ahead in performance of the designs coming out of ARM. This is not something to be dismissed.
Phones would have no choice but to get bigger to get more powerful or to get longer battery life and perf/watt would hit a wall.
Point being, Apple spends a disproportionately small sum on R&D relative to the size of their earnings and they don't seem to be funding basic research at all like large corporations of the past, e.g. IBM, Bell Labs, Xerox PARC, etc.
With the government cutting funds for basic research, we need corporations who are sitting on $4 trillion in cash, to pick up the slack.
http://krugman.blogs.nytimes.com/2012/07/24/they-didnt-build...
You should see technology as a forest. You can mine it for medical cures, for wood, it's an enormous externality that you leverage. And you have a duty to continue planting more back into it to keep it going for yourself and everyone who comes after you.
The Apple narrative is too bound up in heroic origination stories, without due credit and acknowledge to the huge role played by the rest of the industry. I'm only saying that if one profits immensely by using knowledge produced by one's forefathers, one has a duty to reinvest and keep driving it forward, not hoarding piles of cash. (oh, and not going insanely litigious and secretive on discoveries either :) )
It is troubling that the new players in Silicon Valley are not really committed to basic R&D.