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Apple's proprietary iPhone chips may not surface till next year

post #1 of 36
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Apple's fairly public plans to design a family of exclusive chips to power its next-generation iPhone and multi-touch handheld products may not fully materialize until sometime next year, according to the Wall Street Journal, which provides an overview of the matter with a few additional details.

The report published Thursday recaps the Cupertino-based company's acquisition of the 150-person P.A. Semi chip design firm and the subsequent hires of two key (1, 2) chip architects from ATI/AMD, including former chief technology officer of AMD's graphics products group Raja Koduri, who the financial paper says started work at the iPhone maker this week.

It adds, however, that the company's efforts to amass its own team of chip designers may be even more extensive than once thought. In particular, the report points out that there are more than 100 people listing current Apple job titles on their LinkedIn professional networking profiles with past expertise in chips, including veterans of Intel, Samsung and Qualcomm,

The Journal even rifled through Apple job postings on a variety of employment websites and turned up dozens of interesting calls for chip engineers, including two listings for people versed in handwriting recognition technology, others for designers with expertise in chips for managing displays, and one for a position that involves "testing the functional correctness of Apple developed silicon."

Citing people familiar with the matter, the paper went on to note that Apple even participated in a job fair this month "for soon-to-be-unemployed engineers at memory chip company Spansion," which filed for bankruptcy last month. Similar efforts were reportedly in motion even before the company's acquisition of P.A. Semi in April of 2008, which has largely been seen as its most significant move towards internally developed silicon to date.

As has been noted repeatedly by AppleInsider, and confirmed by comments from Apple chief executive Steve Jobs, this emerging family of chip designers spearheaded by the P.A. Semi crew is being tasked with crafting a future generation of chips for Apple's multi-touch devices that will deliver advanced gaming graphics and specialized features while simultaneously improving battery consumption and allowing the company to maintain more secrecy around its intellectual property.

"People familiar with the situation say Mr. Jobs told P.A. Semi engineers last April that he wanted to develop chips internally and didn't want knowledge about the technology to leave Apple," the Journal said. It adds that company executives have long shared their concerns that information shared with outside vendors regarding current iPhone chip designs -- which include tweaked versions of broadly available Samsung processors -- may have have found their way into chips sold to rivals.

Still, Apple's is said to be facing its share challenges in developing its first batch of custom chip designs, with "people familiar with Apple's plans" suggesting the specialized processors may not turn up in shipping products "until next year at the earliest." If true, this would raise new questions about the components making their way into the third-generation iPhone due this summer, which is expected to sport a noticeably different architecture from the first two generations of the touch-screen handset.
post #2 of 36
Ooh First! (that's the tradition isn't it?)

Very smart strategic move - pedal to the metal.
post #3 of 36
unless apple has it's own fab, there will be leaks

they will still have to send the tapes to china for the samples to be manufactured and some of those could be "lost" or "extra" copies made
post #4 of 36
Glad to think same way WSJ does. Just commonsense to use...

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post #5 of 36
Quote:
Originally Posted by al_bundy View Post

unless apple has it's own fab, there will be leaks

they will still have to send the tapes to china for the samples to be manufactured and some of those could be "lost" or "extra" copies made

Two things:

First, while it would make better sense from a supply chain point of view to fab chips overseas, there are fabs in the US they could utilize most likely.

Second, this issue w/ leaks is more the design houses which produce what Apple is asking for and selling that to others. Anyone could just buy whatever device gets Apple's new silicone and try to reverse engineer it, its just harder than having Samsung give you the same chip b/c you asked them for it.
post #6 of 36
I was hoping that the PA Semi work would come out this year. Is this an all-or-nothing endeavor with chip design or can the consolidate small parts slowly over time into their SoC design?
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post #7 of 36
I didn't think these things would show up that quickly. I remember people insisting that Apple was working on these chips a year before Apple bought the company.
post #8 of 36
Quote:
Originally Posted by AppleInsider View Post

... Apple's is said to be facing its share challenges in developing its first batch of custom chip designs...

should be:

"... Apple's is said to be facing its share of challenges in developing its first batch of custom chip designs ..."
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post #9 of 36
Quote:
Originally Posted by Virgil-TB2 View Post

should be:

"... Apple's is said to be facing its share of challenges in developing its first batch of custom chip designs ..."

Well, if you want to get picky, I would like to know what they are talking about when they say "Apple's is..."
It could be Apple's chip design team--or it could be a visiting -'s- cut off from an inappropriately used "it's."
I don't really care, but as long as you brought it up...
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post #10 of 36
Quote:
Originally Posted by al_bundy View Post

unless apple has it's own fab, there will be leaks

they will still have to send the tapes to china for the samples to be manufactured and some of those could be "lost" or "extra" copies made

The technology may be "leaked" but it's much less likely that a data sheet about a custom Apple chip will be leaked with it. Plus it also makes figuring out how the chip works in order to copy/hack it a LOT harder if it's nowhere near an off-the-shelf part.
post #11 of 36
While component costs are Cheap. Push off building your own. Keep up the R&D.
When component costs increase - Build your own at a price no one else can match, because of R&D.

Buying up IP and future IP, great for the legal play.
Using that IP to bait your opponents for the priceless play, endless amounts of fun.

$30 Billion plus cash on hand, enough to supply that fun run.

Only thing to watch out for - those guys in Washington that might need some.\
post #12 of 36
I figured Apple would be delivering the fruits of PA Semi crew labor in 2010.

It just makes sense in a way because we're at the beginning of nextgen core introductions from ARM (Cortex A8 and then A9 MP) and even Imagination is bringing multi-core GPU to the table.

These cores will be available en masse in 2010 and there will be custom designs built around them.

I'm glad Apple's moving from off the shelf parts to custom design. A tailored suit almost always looks better than off the rack.

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post #13 of 36
With the PA Semi acquisition and recently added talent, Apple stands to advance the state of the art for mobile internet devices. This advance will be limited to Apple products because no competitor will be able to match the R&D and expertise need to create similar SOCs.

Any designs that this effort produces will be strongly protected by IP patents and not that easy to copy, even if massive mounts of money were available to create knock offs.

Aphelion
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post #14 of 36
Quote:
Originally Posted by aga View Post

While component costs are Cheap. Push off building your own. Keep up the R&D.
When component costs increase - Build your own at a price no one else can match, because of R&D.

Buying up IP and future IP, great for the legal play.
Using that IP to bait your opponents for the priceless play, endless amounts of fun.

$30 Billion plus cash on hand, enough to supply that fun run.

Only thing to watch out for - those guys in Washington that might need some.\

Nice

You should post more than once a year
post #15 of 36
I have been in the chip synthesis business for a long time. Even if Apple were to leverage all of the IP in the current ASIC designs it got with the P.A. Semi deal it would take a good 9-12 months to design a new SoC that would provide additional functions.

Given Apple's penchant for providing great product differentiation I would think they would want to make some MAJOR changes to the existing IP they already have. With the recent big name hires (the two from AMD) it's clear Apple is going to do some really big stuff. Doing big things takes time.

Even when they are done with the design part of the process (getting to the "tape out" stage) they then have manufacturing and testing of the new hardware. Then software can get a crack at the new hardware. All of that takes time. It's not done in a couple of months.

I can't wait to see what they come up with. It might take a couple of product cycles, but I see Apple changing the way mobile devices are built on the inside that the competition will not be able to duplicate for a very long time. The term SoC means "System on a Chip". I want to see the ENTIRE system on a single die. Now that would be cool. Just one chip that does it all. Hey, I can dream can't I??
post #16 of 36
Quote:
Originally Posted by lecube View Post

I can't wait to see what they come up with. It might take a couple of product cycles, but I see Apple changing the way mobile devices are built on the inside that the competition will not be able to duplicate for a very long time. The term SoC means "System on a Chip". I want to see the ENTIRE system on a single die. Now that would be cool. Just one chip that does it all. Hey, I can dream can't I??

I do too. Stability, performance and a plethora of other admirable traits come easier when you have large scale consolidation into chips.

I think Apple really is in tune with the new Frontier coming that is distinctly different from the desktop OS paradigm.

Here Microsoft is not the 800lb Gorilla and as long as Apple can break the reliance on Windows and Office the sky is the limit.

The future is looking fantastic.
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post #17 of 36
Quote:
Originally Posted by al_bundy View Post

unless apple has it's own fab, there will be leaks

they will still have to send the tapes to china for the samples to be manufactured and some of those could be "lost" or "extra" copies made

If I remember correctly, PA Semi did devices specially for the Military and Government, that alone will not allow them to fab them in certain counties. There are also plenty of foundries in the US. IBM has some of the biggest and they sell foundry time to lots of companies
post #18 of 36
Quote:
Originally Posted by Maestro64 View Post

If I remember correctly, PA Semi did devices specially for the Military and Government, that alone will not allow them to fab them in certain counties. There are also plenty of foundries in the US. IBM has some of the biggest and they sell foundry time to lots of companies

And if Apple makes their phones in the country they could be up higher on list of acceptable HW. I know some high-end Cisco routers are fabbed in the country for security reasons. However, we aren't talking about a a few thousand devices that are so so expensive that rolling in the extra cost of manufacturing is an issue. Can Apple handle (say in 2010) the volume of 40 million iPhones and iPod Touches being made state side and would such volume be enough to make the added cost of manufacturing negligible.

PS: It was stated that Apple was working with PA Semi well before the buyout and that the fruits of this would appear by this year. Now it's 2010 because of these GPU designers coming into Apple?
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post #19 of 36
I wonder if Apple also might be considering designing some proprietary chips for Macs down the road.

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post #20 of 36
Quote:
Originally Posted by solipsism View Post

And if Apple makes their phones in the country they could be up higher on list of acceptable HW. I know some high-end Cisco routers are fabbed in the country for security reasons. However, we aren't talking about a a few thousand devices that are so so expensive that rolling in the extra cost of manufacturing is an issue. Can Apple handle (say in 2010) the volume of 40 million iPhones and iPod Touches being made state side and would such volume be enough to make the added cost of manufacturing negligible.

PS: It was stated that Apple was working with PA Semi well before the buyout and that the fruits of this would appear by this year. Now it's 2010 because of these GPU designers coming into Apple?

i read a similar story a few years ago about clothing being made in china. there is a lead time of 6 months or so and if fashions change then you are screwed. some company started making stuff in the US because it was a lot faster to react to market changes
post #21 of 36
Quote:
Originally Posted by hmurchison View Post

I do too. Stability, performance and a plethora of other admirable traits come easier when you have large scale consolidation into chips.

I think Apple really is in tune with the new Frontier coming that is distinctly different from the desktop OS paradigm.

Here Microsoft is not the 800lb Gorilla and as long as Apple can break the reliance on Windows and Office the sky is the limit.

The future is looking fantastic.

We always have to keep in mind the answer Jobs gave in an interview when he was back at Next. He was asked about what he would do if he were back at Apple. His answer:

"I would milk the Mac for all it was worth, and then I would move on to the next big thing."

I don't remember the exact wording, but that summarizes it up.

It sure do look as though it's what he's doing.
post #22 of 36
Quote:
Originally Posted by melgross View Post

We always have to keep in mind the answer Jobs gave in an interview when he was back at Next. He was asked about what he would do if he were back at Apple. His answer:

"I would milk the Mac for all it was worth, and then I would move on to the next big thing."

I don't remember the exact wording, but that summarizes it up.

It sure do look as though it's what he's doing.

I've thought the same thing, remembering that quote.

There's also a quote from Jobs to the effect that he holds no affection for the past or sees any reason to cling to what has come before. When he judges something's time is done, it's gone as if it never existed (to the point that he sometimes seems to be pulling the rug out from under Apple's users).

I could seriously imagine him feeling like the whole desktop paradigm is played, and being very excited about getting to be at the forefront of the next big thing.

That doesn't mean he's right, necessarily, and I sincerely hope Apple doesn't let it's desktop OS languish (surely they have enough talented people to do both?), but it's certainly easy to get the impression that the "original Mac team" energy at the current Apple is all about touch and handhelds.
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post #23 of 36
Considering the huge cost of R&D, limited market share overall, plus time to market - will Apple achieve the performance and price necessary to stay competitive in the market?

More likely, it looks like a gradual creeping of proprietary chips into the Apple devices would make sense and be less risky... starting with graphics. Regardless, I think it is difficult to be fully vertically integrated and compete.

Meanwhile, with the iPhone, Apple outsourced almost all components. Even assembly got outsourced to Hon Hai. This kind of strategy allowed for a huge supply chain to developed overseas, especially in China. Ready made resources for competitors and piracy.

I just do not understand how US companies can be so short sighted when they outsourced core functions overseas, especially China.
post #24 of 36
Quote:
Originally Posted by AjitMD View Post

Considering the huge cost of R&D, limited market share overall, plus time to market - will Apple achieve the performance and price necessary to stay competitive in the market?

More likely, it looks like a gradual creeping of proprietary chips into the Apple devices would make sense and be less risky... starting with graphics. Regardless, I think it is difficult to be fully vertically integrated and compete.

Meanwhile, with the iPhone, Apple outsourced almost all components. Even assembly got outsourced to Hon Hai. This kind of strategy allowed for a huge supply chain to developed overseas, especially in China. Ready made resources for competitors and piracy.

I just do not understand how US companies can be so short sighted when they outsourced core functions overseas, especially China.

Apple has no intentions of designing their own graphics core. It will be difficult to outdo the pace of commodity hardware but Apple's assembling a nice team and I'm thinking their focus will be on low power and specific features that benefit OS X.

US companies outsource because they ony look at today's costs and really don't factor in the long term costs and ramifications of dealing with China. Though when China rips them off or when India gets caught selling secrets I just laugh because in a way its just desserts for overpaid executives who have no allegiance to anything but profits. </soapbox>
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post #25 of 36
Quote:
Originally Posted by Virgil-TB2 View Post

should be:

"... Apple's is said to be facing its share of challenges in developing its first batch of custom chip designs ..."

"... Apple's said to be facing its share of challenges in developing its first batch of custom chip designs ..."

or

"... Apple is said to be facing its share of challenges in developing its first batch of custom chip designs ..."
post #26 of 36
First it is just software and hardware in general. Now its unibodys and chips specifically. In the next decade Apple will make its own hard-drives, GPU cards, memory, fans, ect.

Lets not forget the aluminum polish.
post #27 of 36
Quote:
Originally Posted by addabox View Post

I've thought the same thing, remembering that quote.

There's also a quote from Jobs to the effect that he holds no affection for the past or sees any reason to cling to what has come before. When he judges something's time is done, it's gone as if it never existed (to the point that he sometimes seems to be pulling the rug out from under Apple's users).

I could seriously imagine him feeling like the whole desktop paradigm is played, and being very excited about getting to be at the forefront of the next big thing.

That doesn't mean he's right, necessarily, and I sincerely hope Apple doesn't let it's desktop OS languish (surely they have enough talented people to do both?), but it's certainly easy to get the impression that the "original Mac team" energy at the current Apple is all about touch and handhelds.

The Mac is still too big a chunk of the business to let it go in any way.

But over time, I've thought about the whole idea of Apple's licensing the OS. I know this is anathema to some people, but it's not really that impossible to believe.

With the way the Macs sales had been growing, it threw my idea out the window, but it's still possible, if the recession puts a damper on sales.

My thoughts are, as expressed here a number of times over the years, is that if Apple's other businesses grow to the point that the Mac represents about 25% or less of the business, but it still growing nicely, Apple could deal out a limited clone business to a few companies. They would have learned from the past.

If that happened, and they lost a third of their Mac sales, it would only be about 8% of the business. That's not much. When they first opened up to unlimited clones, the Mac was 80% of the business, and Apple was in hard times.

This quarter, they announced that their software business did VERY well. I think it did better than ever before. iLife and iWork was singled out.

If Apple licensed out OS X to these manufacturers, and sold more copies of their software, the much higher profits of software would make Apple more profitable than now.

So it could be done. But Mac sales have to represent a smaller proportion of sales and profits for it to happen, but still be desirable to other manufacturers and customers. I think that would be the case.
post #28 of 36
Quote:
Originally Posted by melgross View Post

The Mac is still too big a chunk of the business to let it go in any way.

But over time, I've thought about the whole idea of Apple's licensing the OS. I know this is anathema to some people, but it's not really that impossible to believe.

With the way the Macs sales had been growing, it threw my idea out the window, but it's still possible, if the recession puts a damper on sales.

My thoughts are, as expressed here a number of times over the years, is that if Apple's other businesses grow to the point that the Mac represents about 25% or less of the business, but it still growing nicely, Apple could deal out a limited clone business to a few companies. They would have learned from the past.

If that happened, and they lost a third of their Mac sales, it would only be about 8% of the business. That's not much. When they first opened up to unlimited clones, the Mac was 80% of the business, and Apple was in hard times.

This quarter, they announced that their software business did VERY well. I think it did better than ever before. iLife and iWork was singled out.

If Apple licensed out OS X to these manufacturers, and sold more copies of their software, the much higher profits of software would make Apple more profitable than now.

So it could be done. But Mac sales have to represent a smaller proportion of sales and profits for it to happen, but still be desirable to other manufacturers and customers. I think that would be the case.

That is the first plausible scenario I've read for Apple willingly licensing Mac OS X.
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post #29 of 36
Quote:
Originally Posted by AjitMD View Post


Meanwhile, with the iPhone, Apple outsourced almost all components. Even assembly got outsourced to Hon Hai. This kind of strategy allowed for a huge supply chain to developed overseas, especially in China. Ready made resources for competitors and piracy.

I just do not understand how US companies can be so short sighted when they outsourced core functions overseas, especially China.

It's very simple. It all has to do with the consumer.

The consumer (you know who you are!) constantly demands cheaper products. The only way to meet those demands is to manufacture where costs are much lower.

Thr Japanese used to complain about not being able to sell super VHS or super Beta here in the US because consumers here were only concerned about price.

It's true! That's why Beta died.

People here in the US are known for wanting the cheapest, but not the best.

Even Consumer Reports does this with their "best buy". A whole chain of stores was named after that concept.

Not the best product, but the product thats "ok" but much cheaper.

How many people here look to buy clothes made in the US? No? well thats what happens when we look for shirts that cost half of what it costs to make them here.

Look at how people complain that Apple's machines cost more than PCs, and refuse to understand why. they don't want to know why, they just want them to be cheaper.

If they were made here, as computers used to be when the US was the worlds largest computer exporter, they would be much more expensive.

Would you buy one then?
post #30 of 36
Quote:
Originally Posted by hmurchison View Post


US companies outsource because they ony look at today's costs and really don't factor in the long term costs and ramifications of dealing with China. Though when China rips them off or when India gets caught selling secrets I just laugh because in a way its just desserts for overpaid executives who have no allegiance to anything but profits. </soapbox>

As I've just posted, it's the fault of the consumer always looking for something cheaper, but not better.

Quality costs. China has some of the most modern manufacturing facilities. Thety can make products that equal that made anywhere else, but more cheaply.

Can we blame companies for going there? Not when products are marketed on price as the new Microsoft ads are.

And they're marketed that way, because that's what the consumer wants.
post #31 of 36
Quote:
Originally Posted by solipsism View Post

That is the first plausible scenario I've read for Apple willingly licensing Mac OS X.

If people don't take a fanboy stand (often without realizing they're doing it), it's amazing how things become clearer.

We see a large demand for an OS X based computer, but cheaper, as I've just written about in the two other posts.

If the "cheap" movement can't be stopped, then, somehow, Apple must join it.

To do it themselves might be a problem. But to have two, possibly three, or four other well known manufacturers give the public what they want, would work. But Apple would have to conclude deals about just what these companies would be producing. not like last time, when Apple made an assumption which didn't come true.

If Apple lets the low end sales evaporate, but kept the high end sales, they would be doing dandy. These other companies know how to make cheap machines, the public EXPECTS them to make cheap machines, and Apple can't. Perfect!

If some people decided that they didn't like the cheap machines, but liked the OS, then, next time, they could buy a genuine Apple product, which would carry even more prestige than now. Apple could concentrate on detail and quality.

Increased iPhone/itouch sales, and overall high levels of iPod sales, which surprise to most people, still seem to be growing, will keep Apple's sales moving up.

Software sales are a large part of the business, and are much more profitable than hardware can ever be. We see that from MS's $17.5 billion in profits last year with just $60.5 billion in sales. This is despite massive losses from the games division, internet search, investments and other areas.

In fact, I would like to see Apple do this, if the circumstances are right.
post #32 of 36
Quote:
Originally Posted by melgross View Post

As I've just posted, it's the fault of the consumer always looking for something cheaper, but not better.

Quality costs. China has some of the most modern manufacturing facilities. Thety can make products that equal that made anywhere else, but more cheaply.

Can we blame companies for going there? Not when products are marketed on price as the new Microsoft ads are.

And they're marketed that way, because that's what the consumer wants.

Consumers en masse didn't ask for crap. It's been the abdication of US manufacturing and an emphasis on overconsumption of crap which has led to China and other "near slave labor" sweatshops taking over.

Any wonder the US is in the shitter right now?
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post #33 of 36
Apple is not licensing OS X. Apple is moving to the "Cloud" to offer OS X like apps and services also to non-OS X users.
This Hw group is both for iPhone (maybe a tablet and iPhone nano) but also most probably for AppleTV 3 that will compete with current generation consoles
post #34 of 36
Quote:
Originally Posted by hmurchison View Post

Consumers en masse didn't ask for crap. It's been the abdication of US manufacturing and an emphasis on overconsumption of crap which has led to China and other "near slave labor" sweatshops taking over.

Any wonder the US is in the shitter right now?

Companies give consumers what they want. If consumers want high quality, then they can show that by buying high quality. When they show that they prefer the cheap stuff, manufacturers will scramble trying to find ways of making cheaper products than their competitor. That leads to manufacturing in Mexico, then wherever it's cheaper than there.

People here don't care about nationalistic things such as saving the jobs of people they don't know. The only time that is a concern is when they find it's their own job on the line.

In quite a few other countries, buying goods made locally is a big concern. The governments work to make that happen as well.
post #35 of 36
Quote:
Originally Posted by javierbds View Post

Apple is not licensing OS X. Apple is moving to the "Cloud" to offer OS X like apps and services also to non-OS X users.
This Hw group is both for iPhone (maybe a tablet and iPhone nano) but also most probably for AppleTV 3 that will compete with current generation consoles

apple can have it both ways
apple can keep OS X for itself
and sell the old OS 9.2 !!

it was a rock solid platform
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post #36 of 36
I say bull.

Apple will have at least some kind of custom chips ready for their new products in June. No, it won't be the full master plan that they are building with all those new recent hires. But we will see at least some fruits of their labors concerning custom chips this June.
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