
In Major Shift, Apple Builds Its Own Team to Design Chips - Anon84
http://online.wsj.com/article/SB124104666426570729.html
======
9oliYQjP
I suspect this is Apple's response to a phenomenon originating from China.
I've been reading up about the Chinese knock-off cellphone, or "shanzhai
phone", industry. It has become an incredibly lucrative business. Why?
Because, it's now possible for a company, comprised of a small group of 3-5
people, to design, build (or rather contract to a factory), and market phones.
The technology has gotten to the point where most of the difficult technical
design hurdles have been removed by the presence of a cellphone-on-a-chip so-
to-speak. Sound familiar to anyone around here? So you have these tiny, agile
startups being able to compete with the big boys. A lot of the big boys are
still in denial, and will probably try to respond to the shanzhai phone
industry by attempting to get the Chinese government to crack down on it. Not
Apple; their approach will be to out-innovate these players by playing off the
one weakness that they have: that they cannot design their own cellphone-on-a-
chip.

I won't make any predictions about whether Apple will still be a dominant
player in the cellphone market 10 years from now. However, I will say that
this move almost surely guarantees they will still be in the game by then.
Other companies that rely on the same logistics and supply chain that the
shanzhai guys do probably won't be as lucky unless they change their strategy
as well.

UPDATE: The reading I've been doing was on my iPhone and I didn't bookmark
everything. But one article was definitely this one:
<http://www.nytimes.com/2009/04/28/technology/28cell.html>

~~~
jimmybot
But you know, the whole custom chip "advantage" thing didn't work out so well
last time for Apple, now did it?

~~~
9oliYQjP
It didn't work out because Apple didn't have the in-house talent to pull it
off. They had to rely on IBM and Motorola to do the actual chip design, while
Apple focussed on creating the software for these chips. IBM and Motorola
started to lose interest in promoting PowerPC in anything but the embedded
space and server markets.

This time around, Apple has brought all the talent they need to do all of the
design in-house. No more design-by-committee. We're dealing with Steve Jobs
after all ;)

~~~
Tamerlin
Building a processor that can compete with the x86 juggernaut is expensive.
Look at Intel's budget -- they have the production capacity and engineering
resources to do pretty much whatever they feel like doing.

For Apple to attempt to compete with Intel, it would need to be willing to
invest billions of dollars just in fab technology with a minimum of 3-5 years
before seeing any return on that investment.

And Apple doesn't have the volume... so it wouldn't get the return on
investment.

So Apple worked with IBM and Moto, but weren't buying enough CPU's from either
one to make much of a difference, so after Jobs ended the clone program, the
PPC consortium focussed primarily on embedded computing, in particular
networking. Apple wasn't big enough to merit a custom chip, so it had to make
do with a chip designed for a network router.

And so on...

What they're doing with this in-house design probably differs in several ways.

One is that it's probably aimed at a hand-held device, or something in a
similar form factor. As such, it doesn't need to be able to compete with
Intel's flagship x86, so Intel's technology edge isn't a factor.

Two is that being aimed at a hand-held, it's going to be small -- which means
a lower cost for manufacture. So it doesn't have to have Intel's manufacturing
capacity to gain from economies of scale.

Three is that it doesn't require that Apple builds its own fab; it can develop
a design in-house and bid it out for fabrication to any of the big fabrication
shops out there, like Chartered, UMC, TSMC, Samsung, etc. The fab process
won't offer the same performance (i.e. clock speed ramping) as those of AMD
and Intel, but in the hand-held market, that's a lot less important than
minimizing power consumption.

And if the first fab partner can't keep up, owning the design means that Apple
can follow Microsoft's example and hire a 2nd fab partner to boost production.

I guess that's a long winded way of agreeing with you, but there you go :)

------
ralph
Another case where a computer manufacturer ended up designing their own CPUs
was the UK company Acorn, developer of the BBC computers. A couple of existing
in-house staff, one the author of BBC BASIC, sat down and came up with the
first RISC design intended for home computers; the Acorn RISC Machine, now
known as ARM.

After a while, Apple came on board and the technology was spun out of Acorn
into the new Advance RISC Machines Ltd. with Apple as a shareholder.

<http://en.wikipedia.org/wiki/ARM_processor#History>

------
DLWormwood
When I first read this, I thought "old news." Then I realized that most of
Apple's custom IC development work I rememeber was during the 68k and PPC
eras. Since Apple migrated to Intel, they've been using third-party provided
"north/south bridge" chips and BIOS hardware (albeit a less commonly used
version.) Being a hardware focused company, rather than software, doing this
kind of design work in house has historically been first nature to them.

------
CalmQuiet
The suggestion that the move is "also an effort to share fewer details about
its technology plans with external chip suppliers..." fits Apple's MO: keeping
the lid on future directions.

For the long run it would be a lot more important for Apple to keep a lid on
development of the next quantum leap in its business directions (e.g., iPod,
iPhone) than just price competition on a netbook or whatever.

------
bitwize
Apple may become the new Commodore.

That's how Commodore revolutionized the computer industry -- by acquiring MOS
Technology and designing their chips in-house to drastically lower costs.

------
iamcalledrob
This makes some sense, although wouldn't producing custom designed chips (just
for Apple) push the price up somewhat? Even with Apple's scale?

~~~
tptacek
Apple already gets custom Apple-only chips from Samsung.

------
pxlpshr
The World's Greatest Netbook is soon to be upon us.

Touch screen + OSX + mobile internet = dawn of ubiquitous computing for the
masses. Be prepared.

~~~
ori_b
Such obvious premature hype. For something not even mentioned in the article.

~~~
wmf
Indeed. One of the merits of this WSJ article is that it _doesn't_ contain
ridiculous speculation.

~~~
pxlpshr
Our web traffic for a free iPhone/Touch app suggestions quite the opposite.
The device is already a PC in the most pockets of teenagers, it's only a
matter of time really before screens get larger, and battery power is realized
to its full potential.

I don't expect WSJ to suggest investment or visionary strategies, they just
report the news. I could be wrong about where Apple is headed, but what makes
Apple (and startups) exciting to follow from my perspective is speculation on
what amazing thing they'll do next. Let's not be a negative nacy, slashdot is
that way >>>

~~~
lukifer
I'd say that future "iTouch" devices are going to compete more with the Kindle
than the netbook market. Unless Apple has invented a magic new text input
method, the lack of a touch-type keyboard makes it suck as a full laptop.

Of course, Apple could something else up their sleeve (built-in stand and
wireless keyboard?) Should be interesting to find out.

~~~
hboon
Apple was rumored to have acquired <http://www.fingerworks.com>. They sell
touch keypads and keyboards (TouchStream LP). I have a Touchstream LP
(<http://motionobj.com/blog/new-found-minimalism>). It still works excellently
after 6-7 years now.

It's a flat surface keyboard with no physical buttons. Besides typing on it, a
key thing you can do is gestures, like dragging/expanding out 5 fingers to
zoom in, pinching the middle finger and thumb to cut (cut as in cut-and-
paste). The gestures are configurable. A basic configuration is switching
between Windows, Linux and OS X modes, since the gestures implicitly needs to
invoke Cmd/Ctrl, etc. The built-in software (no installation required) depends
typos and tries to correct them to compensate for the flat typing surface.

If you use the iPhone and/or newer macbooks/macbook pros, you will recognise
that some (I would say only the most basic so far) of this technology have
made it there. So if they did acquire this excellent company (which sadly,
cause the keyboard to be no longer available on the market, except ebay), it's
reasonable to expect more usage of their technology, and its original form -
keyboards and keypads. In its current form, you need quite a bit of practice
to type well, but who knows how they can improve on it.

~~~
samwillis
They were acquired by apple in 2006. Its their technology that is the basis of
all the multi touch stuff that apple is doing.

[http://www.engadget.com/2007/01/22/some-iphone-
touchscreen-r...](http://www.engadget.com/2007/01/22/some-iphone-touchscreen-
roots-splained-by-fingerworks-inventors/)

~~~
hboon
The article only said "few doubt Apple snapped up the pair [co-founders]".
It's a rumor. I think it's highly possible. But it's still only a rumor.

~~~
GHFigs
They've been filing patent applications assigned to Apple since early 2007. I
think that's pretty conclusive.

