Reasons Behind Apple's Strategic Shift Into Chip Design

[MacRumors]

The Wall Street Journal explores the reasons why Apple has been moving towards designing their own chips rather than using off-the-shelf components. This strategic shift was first revealed when Apple acquired chip-designing company P.A. Semi last April. That news has since been followed by a number of new hires from AMD as well as online job postings looking for individuals to test "Apple developed silicon."

According to individuals "familiar with the matter", Apple's current chip plans include lower power designs to prolong battery life in the iPhone and iPod Touch as well as improved graphics circuitry for better gaming and HD video playback. In additional to whatever competitive advantage Apple might get with their own custom designed chips, another benefit would be the ability to maintain more secrecy over their products.

People familiar with Apple's thinking say executives have expressed concern that some information shared with outside vendors could find its way into chips sold to Apple competitors

Jobs reportedly told P.A. Semi engineers that he specifically wanted to develope chips within Apple to prevent knowledge of them leaking out. Apple, of course, is well known for their secrecy. This secrecy has been harder to maintain in recent years due to the number of partners Apple must work with in launching a product. With the iPhone, we've seen rumors coming from both component suppliers as well as mobile carriers who need to be briefed about upcoming releases.

The Wall Street Journal points out, however, that this trend is contrary to most big electronic firms who have moved towards outsourcing components in an effort to reduce costs. Apple is not expected to launch products based on these internally designed chips until next year at the earliest.

Article Link: Reasons Behind Apple's Strategic Shift Into Chip Design

 

[edesignuk]

Secrecy, we must must must have secrecy! </freakish Apple paranoia>

 

[designgeek]

This sounds neat! I'd love my iPod Touch to last longer than one hour playing a game and better performance to boot.

 

[madrag]

it's a good ideia in paper, but in reality they'll end up by outsourcing again (some years from now, when they realise it was a mistake); or maybe not, Apple tends to redefine many things...

 

[talkingfuture]

Seems like a great idea on many fronts. I think Apple will try to move away from mainstream outsourced components wherever they can in the next few years. Especially as we all move away from traditional computers to more embedded devices.

 

[fabiopigi]

maybe apple just wants to have a special chip that only lets the Mac OS X boot if the chip is available, and therefor making it harder for hackintoshs to get built.

now that they do have an own chip designer, why not use them to make the system further propriotary

edit:
to make myself clearer, i'm not talking about a custom CPU, just a custom chip that only let the system boot when present. a chip that only apple has on their logicboards.

 

[edesignuk]

maybe apple just wants to have a special chip that only lets the Mac OS X boot if the chip is available, and therefor making it harder for hackintoshs to get built.

now that they do have an own chip designer, why not use them to make the system further propriotary

Because it would be insanity. Do you know how much Intel spend on R&D, then the factories to make the chips? Apple would soon burn through their cash pile.

Ultra low power, specialised processors I can see happening. Desktop/laptop/workstation processors, no way, and rightly so. Leave those to the pro's.

 

[hiimamac]

Seems like a great idea on many fronts. I think Apple will try to move away from mainstream outsourced components wherever they can in the next few years. Especially as we all move away from traditional computers to more embedded devices.

It's like Ren and Skimpy. A plot to take over the world.

I need a job. Good vibe, thoughts and prayers please. First year anniversary in a few days, vacation cancelled as I was let go. Hugely depressed and bummed.

 

[oingoboingo]

Apple designed its own chipsets for the 68000 and PowerPC Macs, right up to and including the G5. What happened to all those design teams?

 

[sjo]

Because it would be insanity. Do you know how much Intel spend on R&D, then the factories to make the chips? Apple would soon burn through their cash pile.

Ultra low power, specialised processors I can see happening. Desktop/laptop/workstation processors, no way, and rightly so. Leave those to the pro's.

the cell phone industry sells over 1 billion units every year, and the number is probably going to grow from that once the economic downturn is over. apple sells 25m, if we include touch in the number. chip industry has huge scale economies, so it's extremely difficult to see how apple could produce competitive offering on that front. in user interfaces apple has been able to differentiate from the rest, how this would work on component level...

 

[4D4M]

I need a job. Good vibe, thoughts and prayers please. First year anniversary in a few days, vacation cancelled as I was let go. Hugely depressed and bummed.

Sending good vibes your way... best of luck.

 

[Anuba]

it's a good ideia in paper, but in reality they'll end up by outsourcing again (some years from now, when they realise it was a mistake); or maybe not, Apple tends to redefine many things...

Precisely. Good idea on paper.

If they go with different hardware components than everyone else, they'll end up way behind as usual. We all remember the embarrassing time period when IBM couldn't produce a mobile G5 that didn't melt a PowerBook, and so we were stuck with PowerBook G4 for an eternity while Intel's Pentium M/Centrino was running circles around Macs. Soon Intel had CoreDuo and Core2Duo running circles not only around PowerPC but AMD as well. And now Apple is hiring from AMD -- congratulations...

The primary argument against Apple's products has always been "overpriced and underpowered". This plan will make their products even more overpriced and more underpowered.

 

[Truffy]

Because it would be insanity. Do you know how much Intel spend on R&D, then the factories to make the chips? Apple would soon burn through their cash pile.

So they bring (limited) R&D inhouse and outsource the fabrication. Stills gives them control and exclusive access to key components. Non-key components would be bought in in the usual manner.

 

[fabiopigi]

Because it would be insanity. Do you know how much Intel spend on R&D, then the factories to make the chips? Apple would soon burn through their cash pile.

Ultra low power, specialised processors I can see happening. Desktop/laptop/workstation processors, no way, and rightly so. Leave those to the pro's.

i know, i'm not saying they should make a new processor.
i'm just saying they should make some unique chip, that acts like a authentification chip for macintoshs.
and that the EFI only boots OS X when this authent. chip is there.

sure, there are already TCPM (or whatever they are called) on our logicboards, but the same chips are "of the shelve" and are widly used in other mainboards.

all i'm saying, lets make a tiny, simple chip, that calculates a hash, and when the hash is correct boot OS X.
if the chip is not present and therefor no hash is generated, dont boot OS X cause you're not on a macintosh.

 

[edesignuk]

i know, i'm not saying they should make a new processor.
i'm just saying they should make some unique chip, that acts like a authentification chip for macintoshs.
and that the EFI only boots OS X when this authent. chip is there.

sure, there are already TCPM (or whatever they are called) on our logicboards, but the same chips are "of the shelve" and are widly used in other mainboards.

all i'm saying, lets make a tiny, simple chip, that calculates a hash, and when the hash is correct boot OS X.
if the chip is not present and therefor no hash is generated, dont boot OS X cause you're not on a macintosh.

If they did that, went to the trouble and expense of implementing it, it'd be spoofed by hackers in an instant.

 

[Morky]

it's a good ideia in paper, but in reality they'll end up by outsourcing again (some years from now, when they realise it was a mistake); or maybe not, Apple tends to redefine many things...

That's about where I stand on this. Either it will be brilliant move, or it won't work, but the reward far outweighs the risk. It's not like they are building their own chip fabs. If Apple chips aren't cutting it, they can always buy them.

 

[slackpacker]

Plus with all the problems that Nvidia's engineers have created with the heat monster in my MBP

 

[Schizoid]

Vertical integration, very good for Apple, as long as they have the necessary expertise to pull off chip design, testing and manufacture...

What DOES go on inside Apple HQ?!

 

[dernhelm]

Lunacy

Not even Apple is paranoid enough to take on chip design for the sole purpose of bettering their secrecy.

That's a huge amount of overhead, especially in this economy. It may be a side-benefit, but it in no way drove the decision.

Apple is far too interested in making money than to take on something like chip design just to increase secrecy.

 

[Morky]

Plus with all the problems that Nvidia's engineers have created with the heat monster in my MBP

I've got the same machine as you an it runs a hell of a lot cooler that my 2006 gen 1 MBP. Talk about hard boiled eggs!

 

[dernhelm]

It's like Ren and Skimpy. A plot to take over the world.

I thought that was Pinky and the Brain...

 

[designgeek]

Plus with all the problems that Nvidia's engineers have created with the heat monster in my MBP

No kidding, the 9600 cooks! I used to drop out of games, I don't since I got iStat pro for my ipod, and check the temps and got between 160 and 180+. And on top of that the whole case gets hot since it's solid aluminum. I'd like 128 GFlops at less than a simmer please.

 

[SydneyDev]

I wonder if it's just generally they don't want their ideas nicked, or is it some specific new idea they want to protect?

Anyway, after years of competing with PC vendors I'm sure Apple knows the benefits of mass production. I suspect any custom chips will only be a small part of the phone and it will still be 90% off-the-shelf.

 

[macresearcher]

Design Versus Production

I think we should distinguish between chip design and chip production. It is highly likely that the Apple will design its own chips. I suspect that is not highly likely that the Apple will produce its own chips. As someone already noted, the Apple will not be able to achieve the economies of scale of other chip producers.

The Apple does not actually produce a lot of its products. But it does design all of them. And it is the design that matters.

 

[Mackan]

With their own chips, sure they can optimize things like power consumption, but they also for sure will have the ability to apply a lot more restrictions on their products and customers... I am not surprised.