Sigh. This is another article where DED gets much of it right, but uses too much hyperbole to have the article seem more than a rant. He also gets enough if it wrong to make it seem worthless.
I really hate saying this almost every article of his. But I wish AI would tell him to reign in his overbearing style, and just tell the facts.
The main thrust here is that Apple should stop using Qualcomm, and produce their own radios. Radios are a very difficult thing. Qualcomm's are the best, and that's why Apple is using them. For Apple to develop their own is going to cost plenty, and take some years.
We can look to the A4 chip for some guidance here. That chip was a small deviation from the standard ARM design. Just a few power saving improvements from their new purchase Intrinsity, which they actually bought after the A4 came out. It likely had some very minor improvements from the old team (what was left of it) from
But Apple could ease into it because they went to an architecture license from ARM. This is very important to understand here, because in the context of making radio chips, there are no architecture licenses Apple could go to. So Apple could take the ARM designs and make minor improvements the first year, more the second year, and more the third. Then they could take ARM's 64 bit design and go off on their own with major improvemts, that they would expand upon with the A8, and later.
But with radios, they would need to start from scratch. And with other companies such as Qualcomm, Broadcomm, Intel, Nokia, Samsung and others holding the majority of patents in this area, they would be paying a lot of money per chip to license those patents, even if they would be SEP patents, because there would be so many, from so many different vendors. And then there would be patents for radios that are not SEP based, that would coat even more.
So the question is how Apple would go about this. Even if the patent issues were resolved in Apple's favor, the question would remain about how long it would take them to come up with a leading edge chip, as Qualcomm's are. It would take years, and Qualcomm, and others are not sitting still. Having nothing to build upon, Apple would need to do all the work themselves. Licensing patents enables the work to be done, but it doesn't design chips for you.
So we really don't know why Apple is hiring those engineers. It may not have to do with Apple designing their own radios, but rather how to better integrate them. We've seen Apple but two GPU companies over the years, but Apple has never produced GPUs. The same could be true here.
Perhaps Apple is attempting to configure Qualcomm's chips within Apple's SoC. That would require radio engineers.
I think the implication is that there are not enough LTE parts vendors. Qualcomm basically owns enough patents in LTE to make it impossible to build LTE chips without licensing their patents, or straight out buying chips from them.
There appears to be ways around the Qualcomm baseband patents (including LTE), since MediaTek are selling outside of China. Therefore, Apple should be able to get around them, too (or license them - doubtful). The link below also says Broadcom is working on LTE (armed with patents bought from Renesas).
Why so many people think that building a LTE chip would involve stealing IP I don't get. Most of the patents are available for anyone in the consortium to use and pay a flat fee. Apple will pay that fee. Many Qualcom patents are available that way.
Flat fee? Which consortium? Ericsson wants a very high flat fee for their FRAND patents and what makes you believe Qualcomm wouldn't demand just as much? Apple pays for Qualcomm patents as well as other for other patents but if they could manufacturer their own LTE chip for less money than paying Qualcomm for the chip plus all the other patents costs, then it would make financial sense. Apple doesn't steal IP but they also don't like paying more for it that they should. An iPhone works without LTE, especially on a Verizon network. To me, WiFi patents are more important to an iPhone than LTE patents and should be priced accordingly.
I don't know if a radio chip circuitry can co-exist on a SoC with other digital circuitry without a lot f cross-talk. but if that were possible, then Apple should buy the rights to do that from Qualcom and get on with it... No need to pay the foundry costs for two chips and eat up more space in the iDevice. This leverages Apple's ability to customize while not carrying the load of staying competitive in the radio market.
Not really. Apple's success as a chip manufacturer is zero by either metric. They're providing great chips to themselves, but they aren't making any money in the market on them. They're just an in-house manufacturer.
Now by quality standards, they may be a winner. By price/unit for themselves standards, they may be a winner. But it isn't like companies are comparing Intel v Apple and choosing Apple. Apple's not even a choice in the marketplace.
I haven't done the math but following along with your argument, I wonder what sort of revenue a third party would have made had they supplied Apple with all the chips Apple used. In other words think of Apple's chip division as being stand alone. Then see how that theoretical division would have compared to Intel et al.
I'm not sure that either are really applicable. What's Intel really lost? The opportunity to fab chips for Apple? Granted there's money there, but it's hardly 'F-You Money', and it's definitely front-loaded with CapEx, even for an established chip manufacturer (e.g. Samsung's Austin US$ 4 BILLION foundry). So what they've lost is the chance to make mobile chips for everyone else. Well, that comes with the same CapEx requirements, but then you're stuck selling to second, and lower, tiers (remember Samsung is it's own fab). The HTCs and LGs of the world don't have Apple's pricing leverage, but they're also buying smaller quantities for lower-margin phones that aren't really profitable. Hardly the best customers to have. So basically Intel would be WalMart but faced with a much stronger K-Mart (Samsung). That's kind of a bag of hurt.
Intel's definitely lost out on mobile, but in 5 years we may look back on this the same way Microsoft "lost out" on buying Yahoo! (i.e. dodging a huge bullet).
The bigger picture is ... Intel didn't get into mobile and their traditional market is dying. To me that is a sort of 'losing'.
There appears to be ways around the Qualcomm baseband patents (including LTE), since MediaTek are selling outside of China. Therefore, Apple should be able to get around them, too (or license them - doubtful). The link below also says Broadcom is working on LTE (armed with patents bought from Renesas).
Nobody can get around them if they sell in a country where patents are enforced, which is most of the developed world. All those companies have their own patents, and license SEPs where they need to. There is no way around this.
I don't know if a radio chip circuitry can co-exist on a SoC with other digital circuitry without a lot f cross-talk. but if that were possible, then Apple should buy the rights to do that from Qualcom and get on with it... No need to pay the foundry costs for two chips and eat up more space in the iDevice. This leverages Apple's ability to customize while not carrying the load of staying competitive in the radio market.
I haven't done the math but following along with your argument, I wonder what sort of revenue a third party would have made had they supplied Apple with all the chips Apple used. In other words think of Apple's chip division as being stand alone. Then see how that theoretical division would have compared to Intel et al.
I've seen estimates for Apple's SoCs anywhere from $25 - $32. If we assume an average price for all of them, including the oldest, possible an average would be around $23, I believe. If that's 250 million SoCs a year right now, that would be be $5.75 billion. That ain't chump change, and it is growing. If the manufacturer gets, say, 10% net from that, it's close to $600 million profit. Not bad at all. That why Samsung wanted Apple's business back so badly. Analysts said that it comprised almost 65% of Samsung's total SoC business.
When I saw the title of this I shrugged it off because I know that Qualcomm has quite the gauntlet of patent protection around their core IP and I cannot imagine Apple trying to do a head-on assault, much less conspire with a Chinese manufacturer/licensee to do an end around run. I just don't see Apple taking on such a challenge and alienating a major partner in the process. There are also a couple of other factors to consider. The ones that come to mind are the opportunity costs associated with funneling investment dollars on rather well defined components rather than new system features and breakthrough innovations. Apple becoming more vertically integrated would provide savings and economy of scale but at what cost? Is this even a core competency Apple needs to power the company 5-10 years down the line? Is Apple in a position to take on this technology at a leadership level and still focus on complete products and the ecosystem? At what point does Apple become over invested in just one collection of components for a small category of products and find themselves unprepared to ride the next wave of innovation where their previous investments become commodity?
I think Apple will always seek to achieve the right balance between what they feel are core in-house competencies, capabilities, and capacities and what they feel are better served by strategic partnerships. The fact that they continue to shuttle major amounts of business to a company that stabbed them in the back (Samsung) tells you that they don't feel that they need to control every technology and component that makes up their products.
In the case of baseband, you've made your own argument that actually supports Apple bringing that tech in house. In a word, INNOVATION! Controlling the baseband radios allows Apple to not only save money in the Billions, but also the fact that Apple's strategy has always been to bring unique and innovative solutions to consumers within vertical integration. Period. What would drive this effort is the fact that even more of our life activities are going to become wireless - from cooking, to lighting, to heating, to cooling, to driving, to health and fitness, to sleep, to security, etc. etc. all through our mobile devices.
In the case of Samsung, the only reason Apple is doing any business with them at all is simply the need for their capacity and reliability. There isn't another manufacturer out their that can produce in the volumes and within the timeframes that Apple requires.
Sigh. This is another article where DED gets much of it right, but uses too much hyperbole to have the article seem more than a rant. He also gets enough if it wrong to make it seem worthless.
I really hate saying this almost every article of his. But I wish AI would tell him to reign in his overbearing style, and just tell the facts.
The main thrust here is that Apple should stop using Qualcomm, and produce their own radios. Radios are a very difficult thing. Qualcomm's are the best, and that's why Apple is using them. For Apple to develop their own is going to cost plenty, and take some years.
We can look to the A4 chip for some guidance here. That chip was a small deviation from the standard ARM design. Just a few power saving improvements from their new purchase Intrinsity, which they actually bought after the A4 came out. It likely had some very minor improvements from the old team (what was left of it) from
But Apple could ease into it because they went to an architecture license from ARM. This is very important to understand here, because in the context of making radio chips, there are no architecture licenses Apple could go to. So Apple could take the ARM designs and make minor improvements the first year, more the second year, and more the third. Then they could take ARM's 64 bit design and go off on their own with major improvemts, that they would expand upon with the A8, and later.
But with radios, they would need to start from scratch. And with other companies such as Qualcomm, Broadcomm, Intel, Nokia, Samsung and others holding the majority of patents in this area, they would be paying a lot of money per chip to license those patents, even if they would be SEP patents, because there would be so many, from so many different vendors. And then there would be patents for radios that are not SEP based, that would coat even more.
So the question is how Apple would go about this. Even if the patent issues were resolved in Apple's favor, the question would remain about how long it would take them to come up with a leading edge chip, as Qualcomm's are. It would take years, and Qualcomm, and others are not sitting still. Having nothing to build upon, Apple would need to do all the work themselves. Licensing patents enables the work to be done, but it doesn't design chips for you.
So we really don't know why Apple is hiring those engineers. It may not have to do with Apple designing their own radios, but rather how to better integrate them. We've seen Apple but two GPU companies over the years, but Apple has never produced GPUs. The same could be true here.
Perhaps Apple is attempting to configure Qualcomm's chips within Apple's SoC. That would require radio engineers.
I feel the same. There is no real benefit for Apple to going after replacing the Qualcomm baseband chip at this moment. It will be too much effort with very little gain ( gain only if Apple can come up with competitive baseband chip which is tall order itself).
Baseband chips quickly becomes commodity product just like camera sensor and screen. It does not carry those high premium margin that it once had 10 - 15 years ago. This is why Qualcomm has been put so much effort on their AP for last 10 -15 years.
The best thing that Apple can do is to continue to do what they have been doing well, eliminating android from high end market. In order for Qualcomm to keep stay in market leader position, they need to grow. And they can't grow if they don't have customer to sell their premium chip. Qualcomm already have a lot of dependency on Samsung for their high end chip. A bit too much reliance at this time since many handset players are going down at this moment (Motorola, blackberry, Nokia etc.) Hence, the performance of Samsung (and any major android players) will significantly impact Qualcomm's success and it will prevent them grow not as fast as it has been, which will reduce their influence on industry in the long run.
Not really. Apple's success as a chip manufacturer is zero by either metric. They're providing great chips to themselves, but they aren't making any money in the market on them. They're just an in-house manufacturer.
Now by quality standards, they may be a winner. By price/unit for themselves standards, they may be a winner. But it isn't like companies are comparing Intel v Apple and choosing Apple. Apple's not even a choice in the marketplace.
This is correct.
Apple didn't beat Intel in the mobile chip battle. Intel shot themselves in the foot. No one is buying Intel processors and putting them into smartphones.
Similarly, if Apple moves to their own baseband processor, the loser is Qualcomm, but only in terms of losing unit shipments to Apple. They still have all the other smartphone/tablet manufacturers as potential customers. Apple accounts for approximately 16.5% of worldwide smartphone unit sales, even if they're hogging up nearly all of the profit.
The article title is sheer click-bait and not accurate.
I must be missing something... when did Apple beat Intel in mobile chips?
Apple makes great chips and all, but "beating Intel" implies others choose A-series processors over Intel. They don't - Apple doesn't make them available. Samsung or Qualcomm might be beating Intel - Apple's on the sidelines.
A common fallacy is to suppose that because Apple is just one company, it must be "sidelined" by all those other companies if it doesn't share its business with them. If Apple's getting 80-90% of sales (not "shipments") of quality (app-market-capable) tablets, then it's hardly on the sidelines. Instead, Apple occupies the field, while Intel loses ka-billions trying to get off the mobile-chip sidelines.
Comments
Sigh. This is another article where DED gets much of it right, but uses too much hyperbole to have the article seem more than a rant. He also gets enough if it wrong to make it seem worthless.
I really hate saying this almost every article of his. But I wish AI would tell him to reign in his overbearing style, and just tell the facts.
The main thrust here is that Apple should stop using Qualcomm, and produce their own radios. Radios are a very difficult thing. Qualcomm's are the best, and that's why Apple is using them. For Apple to develop their own is going to cost plenty, and take some years.
We can look to the A4 chip for some guidance here. That chip was a small deviation from the standard ARM design. Just a few power saving improvements from their new purchase Intrinsity, which they actually bought after the A4 came out. It likely had some very minor improvements from the old team (what was left of it) from
But Apple could ease into it because they went to an architecture license from ARM. This is very important to understand here, because in the context of making radio chips, there are no architecture licenses Apple could go to. So Apple could take the ARM designs and make minor improvements the first year, more the second year, and more the third. Then they could take ARM's 64 bit design and go off on their own with major improvemts, that they would expand upon with the A8, and later.
But with radios, they would need to start from scratch. And with other companies such as Qualcomm, Broadcomm, Intel, Nokia, Samsung and others holding the majority of patents in this area, they would be paying a lot of money per chip to license those patents, even if they would be SEP patents, because there would be so many, from so many different vendors. And then there would be patents for radios that are not SEP based, that would coat even more.
So the question is how Apple would go about this. Even if the patent issues were resolved in Apple's favor, the question would remain about how long it would take them to come up with a leading edge chip, as Qualcomm's are. It would take years, and Qualcomm, and others are not sitting still. Having nothing to build upon, Apple would need to do all the work themselves. Licensing patents enables the work to be done, but it doesn't design chips for you.
So we really don't know why Apple is hiring those engineers. It may not have to do with Apple designing their own radios, but rather how to better integrate them. We've seen Apple but two GPU companies over the years, but Apple has never produced GPUs. The same could be true here.
Perhaps Apple is attempting to configure Qualcomm's chips within Apple's SoC. That would require radio engineers.
I think the implication is that there are not enough LTE parts vendors. Qualcomm basically owns enough patents in LTE to make it impossible to build LTE chips without licensing their patents, or straight out buying chips from them.
There appears to be ways around the Qualcomm baseband patents (including LTE), since MediaTek are selling outside of China. Therefore, Apple should be able to get around them, too (or license them - doubtful). The link below also says Broadcom is working on LTE (armed with patents bought from Renesas).
http://www.fiercewireless.com/story/intel-mediatek-broadcom-and-nvidia-try-catch-qualcomm-lte/2014-01-10
Why so many people think that building a LTE chip would involve stealing IP I don't get. Most of the patents are available for anyone in the consortium to use and pay a flat fee. Apple will pay that fee. Many Qualcom patents are available that way.
Flat fee? Which consortium? Ericsson wants a very high flat fee for their FRAND patents and what makes you believe Qualcomm wouldn't demand just as much? Apple pays for Qualcomm patents as well as other for other patents but if they could manufacturer their own LTE chip for less money than paying Qualcomm for the chip plus all the other patents costs, then it would make financial sense. Apple doesn't steal IP but they also don't like paying more for it that they should. An iPhone works without LTE, especially on a Verizon network. To me, WiFi patents are more important to an iPhone than LTE patents and should be priced accordingly.
Bingo
I haven't done the math but following along with your argument, I wonder what sort of revenue a third party would have made had they supplied Apple with all the chips Apple used. In other words think of Apple's chip division as being stand alone. Then see how that theoretical division would have compared to Intel et al.
Single buyer, don't they teach Greek in UK schools anymore?
The bigger picture is ... Intel didn't get into mobile and their traditional market is dying. To me that is a sort of 'losing'.
Nobody can get around them if they sell in a country where patents are enforced, which is most of the developed world. All those companies have their own patents, and license SEPs where they need to. There is no way around this.
They do.
I've seen estimates for Apple's SoCs anywhere from $25 - $32. If we assume an average price for all of them, including the oldest, possible an average would be around $23, I believe. If that's 250 million SoCs a year right now, that would be be $5.75 billion. That ain't chump change, and it is growing. If the manufacturer gets, say, 10% net from that, it's close to $600 million profit. Not bad at all. That why Samsung wanted Apple's business back so badly. Analysts said that it comprised almost 65% of Samsung's total SoC business.
Wow, some controversial recommendations there! Apple should stop being the good guy and just steal IP like certain other big tech giants?
But I would question the idea that Apple should even try to make their own baseband chip (honestly or dishonestly).
Baseband stuff is FRAND so it'd cost Apple a hell of a lot less to pay to use the IP and make their own chips.
Chances are, Apple will be creative and push the boundaries, giving us new stuff and giving them their own IP.
Bingo
At least someone else has realized why they need to do this. I was a fully autonomous ?Watch soon.
In the case of baseband, you've made your own argument that actually supports Apple bringing that tech in house. In a word, INNOVATION! Controlling the baseband radios allows Apple to not only save money in the Billions, but also the fact that Apple's strategy has always been to bring unique and innovative solutions to consumers within vertical integration. Period. What would drive this effort is the fact that even more of our life activities are going to become wireless - from cooking, to lighting, to heating, to cooling, to driving, to health and fitness, to sleep, to security, etc. etc. all through our mobile devices.
In the case of Samsung, the only reason Apple is doing any business with them at all is simply the need for their capacity and reliability. There isn't another manufacturer out their that can produce in the volumes and within the timeframes that Apple requires.
Aarg!
Sigh. This is another article where DED gets much of it right, but uses too much hyperbole to have the article seem more than a rant. He also gets enough if it wrong to make it seem worthless.
I really hate saying this almost every article of his. But I wish AI would tell him to reign in his overbearing style, and just tell the facts.
The main thrust here is that Apple should stop using Qualcomm, and produce their own radios. Radios are a very difficult thing. Qualcomm's are the best, and that's why Apple is using them. For Apple to develop their own is going to cost plenty, and take some years.
We can look to the A4 chip for some guidance here. That chip was a small deviation from the standard ARM design. Just a few power saving improvements from their new purchase Intrinsity, which they actually bought after the A4 came out. It likely had some very minor improvements from the old team (what was left of it) from
But Apple could ease into it because they went to an architecture license from ARM. This is very important to understand here, because in the context of making radio chips, there are no architecture licenses Apple could go to. So Apple could take the ARM designs and make minor improvements the first year, more the second year, and more the third. Then they could take ARM's 64 bit design and go off on their own with major improvemts, that they would expand upon with the A8, and later.
But with radios, they would need to start from scratch. And with other companies such as Qualcomm, Broadcomm, Intel, Nokia, Samsung and others holding the majority of patents in this area, they would be paying a lot of money per chip to license those patents, even if they would be SEP patents, because there would be so many, from so many different vendors. And then there would be patents for radios that are not SEP based, that would coat even more.
So the question is how Apple would go about this. Even if the patent issues were resolved in Apple's favor, the question would remain about how long it would take them to come up with a leading edge chip, as Qualcomm's are. It would take years, and Qualcomm, and others are not sitting still. Having nothing to build upon, Apple would need to do all the work themselves. Licensing patents enables the work to be done, but it doesn't design chips for you.
So we really don't know why Apple is hiring those engineers. It may not have to do with Apple designing their own radios, but rather how to better integrate them. We've seen Apple but two GPU companies over the years, but Apple has never produced GPUs. The same could be true here.
Perhaps Apple is attempting to configure Qualcomm's chips within Apple's SoC. That would require radio engineers.
I feel the same. There is no real benefit for Apple to going after replacing the Qualcomm baseband chip at this moment. It will be too much effort with very little gain ( gain only if Apple can come up with competitive baseband chip which is tall order itself).
Baseband chips quickly becomes commodity product just like camera sensor and screen. It does not carry those high premium margin that it once had 10 - 15 years ago. This is why Qualcomm has been put so much effort on their AP for last 10 -15 years.
The best thing that Apple can do is to continue to do what they have been doing well, eliminating android from high end market. In order for Qualcomm to keep stay in market leader position, they need to grow. And they can't grow if they don't have customer to sell their premium chip. Qualcomm already have a lot of dependency on Samsung for their high end chip. A bit too much reliance at this time since many handset players are going down at this moment (Motorola, blackberry, Nokia etc.) Hence, the performance of Samsung (and any major android players) will significantly impact Qualcomm's success and it will prevent them grow not as fast as it has been, which will reduce their influence on industry in the long run.
Not really. Apple's success as a chip manufacturer is zero by either metric. They're providing great chips to themselves, but they aren't making any money in the market on them. They're just an in-house manufacturer.
Now by quality standards, they may be a winner. By price/unit for themselves standards, they may be a winner. But it isn't like companies are comparing Intel v Apple and choosing Apple. Apple's not even a choice in the marketplace.
This is correct.
Apple didn't beat Intel in the mobile chip battle. Intel shot themselves in the foot. No one is buying Intel processors and putting them into smartphones.
Similarly, if Apple moves to their own baseband processor, the loser is Qualcomm, but only in terms of losing unit shipments to Apple. They still have all the other smartphone/tablet manufacturers as potential customers. Apple accounts for approximately 16.5% of worldwide smartphone unit sales, even if they're hogging up nearly all of the profit.
The article title is sheer click-bait and not accurate.
I must be missing something... when did Apple beat Intel in mobile chips?
Apple makes great chips and all, but "beating Intel" implies others choose A-series processors over Intel. They don't - Apple doesn't make them available. Samsung or Qualcomm might be beating Intel - Apple's on the sidelines.
A common fallacy is to suppose that because Apple is just one company, it must be "sidelined" by all those other companies if it doesn't share its business with them. If Apple's getting 80-90% of sales (not "shipments") of quality (app-market-capable) tablets, then it's hardly on the sidelines. Instead, Apple occupies the field, while Intel loses ka-billions trying to get off the mobile-chip sidelines.
(Great article, BTW!)
That's funny, we know the definition, what the OP, and I don't get is in what way is Sony the only buyer?