In Major Shift, Apple Builds Its Own Team to Design Chips
online.wsj.com
online.wsj.com
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
What's interesting is that with Google Android, the phone OS is now an open game. However, Android requires significant CPU horsepower generally not found in Chinese phones.
This didn't stop the manufacturers of the 'Dream G2,' a phone designed to look like Android. But (unfortunately) it's not: http://www.engadget.com/2009/01/15/dream-g2-doesnt-get-the-i...
They were totally caught flat-footed by the iPhone. Apparently their last annual meeting fell just after the launch of the iPhone 3G. When their cellphone head honcho got up to talk, apparently he took a visible sigh and essentially admitted that the high-end market, which they want to be in during the recession (focus on profit margins not unit sales) was essentially stolen from them by Apple, and that their growth numbers in this segment had been slashed. They're essentially ceding the market to Apple in the short term while they go back to the drawing board and try to get the software part right. In other words, what Apple did to them in the MP3 player market is happening to them in the cellphone market. Keep this in mind the next time somebody tells you it's foolish to think that iPhone OS won't be the defacto mobile platform in 3 years time.
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 ;)
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 :)
But, Apple's been designing custom support chips forever, so this isn't completely out of line for them.
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.
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.
That's how Commodore revolutionized the computer industry -- by acquiring MOS Technology and designing their chips in-house to drastically lower costs.
Touch screen + OSX + mobile internet = dawn of ubiquitous computing for the masses. Be prepared.
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 >>>
Of course, Apple could something else up their sleeve (built-in stand and wireless keyboard?) Should be interesting to find out.
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.
http://www.engadget.com/2007/01/22/some-iphone-touchscreen-r...
A netbook is not a mobile device. Its the wrong model.