Apple goes on the defensive: brings chips in-house

Apple goes on the defensive: brings chips in-house

Summary: Sometimes that best offense is a good defense. In order to thwart leaks of its strategy and intellectual property Apple is bringing more chip-making expertise in-house.


Apple’s PA Semi buyout: A defensive move?Sometimes that best offense is a good defense. In order to thwart leaks of its strategy and intellectual property Apple is bringing more chip-making expertise in-house.

WSJ has a good article today about Apple's shift to focusing on chip design and fabrication. It's an analysis of Apple's recent hiring of Raja Koduri and Bob Drebin, both former CTOs of the graphics products group at chip maker Advanced Micro Devices Inc.

The moves follow Apple's acquisition of P.A. Semi in April 2008 which Steve Jobs explained as a way to acquire expertise and technology to help run increasingly sophisticated software on iPhones and iPods. Furthering its focus on chips Apple purchased a 3.6 percent stake of Imagination Technologies, which designs mobile graphics processors for mobile phones, in December 2008.

WSJ notes that Apple is focusing on chips more intently than ever and has several U.S. job opportunities for chip-related positions with descriptions like "testing the functional correctness of Apple developed silicon."

Perhaps the most interesting spin on Apple's recent taste for chips is that it could be privacy-related.

Besides a desire to beat rivals to market with new features, Apple's shift is also an effort to share fewer details about its technology plans with external chip suppliers...

executives have expressed concern that some information shared with outside vendors could find its way into chips sold to Apple competitors.

It's a good read.

Topics: Apple, Hardware, Networking, Processors

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  • It worked for Trackpads so why not...

    Apple used to use synaptics for their touchpads on the iPod/Powerbook. Then they went in house and iPod prices went down (unrelated?) and Macbooks now have pretty cool trackpad features. So if they want to do this with chips then it can be a good thing for the customer in terms of pricing and features.

    The only negative I see is that the switch to standard PC parts and the Intel chip made bootcamp possible so I hope in the future they don't break it or anything.
    • Not just Trackpads.

      I don't see anything to get worried about. Many people don't realize
      the positive impact of Bootcamp on Mac sales. Another helpful
      feature is the ability to run in virtual mode Windows and any other OS.
      To do these things successfully chips have to be designed to
      encompass these features.

      Apple has always tried to distinguish itself from other computer
      companies with leading edge hardware and software. The hardware is
      what the public sees first. But under the hood it is the software that
      fully exploits hardware feature sets.

      Years ago the main argument against Apple was that it systems were
      too proprietary. To me it is this kind of control over their products
      that has fueled Apple's rise of late. Apple products aren't meant to be
      like the products they compete against. Now Apple can say that their
      components are not found in any other non Apple products. The new
      buzz word for Apple will be "exclusively".

      There are multitudes of talented people out of work. Apple is smart to
      cherry pick the herds. Apple must continue their innovations across
      their lines. It can be summed up as evolve or die. Plus secrets made
      in-house tend to stay in house.
  • These moves seem overtly offensive not defensive [nt]

    • Offensive minded.

      I agree with you. Apple has momentum and the timing couldn't be
      better for bold moves like this. Once Apple has the most envied chip
      sets in their product lines, the main focus of their marketing will be
      total Mac integration.

      For example I have several friends who own iPhones and iPods. They
      however use Windows based computers. Yes iTunes and the App
      store function ok with Windows. Yes they can get their iPhone
      updates via Windows Apple updater. What really takes their breath
      away is when they connect their devices to my iMac. I set at my
      Windows computer across the room and listen to the OOOOs and
      AHHHHs. Each time one of them had a problem with iPhone updates
      or software installs they come to my iMac for rescue.

      Now let Apple build in many of the desired features customers want
      and sell the idea of the Total Mac experience and voila! No other electronic company can tout this level of synergy across its product
      lines. Of the friends that I mentioned, 100% want a Mac computer their next purchase. They will also want Mobile.Me and probably
      Apple TV. They won't have to wonder if these components work
      • There's a stronger current at work here ...

        With slim margins and rampant piracy, maybe software alone in the long term is a losing proposition. The common wisdom says Jobs lost to Gates because Microsoft just made software and let OEMs sell the OS for them. Maybe the common wisdom is wrong.

        Microsoft is scrambling to figure out how to make money on netbooks. Meanwhile Apple is sitting on a huge warchest of cash, and has more buzz around their netbook - a product that doesn't exist yet - than anything else out there. If Apple were to release an iPhone OS-based netbook, it would be a revenue trifecta: hardware revenues, software revenues through the App Store, and increased Mac sales for ease of interoperability.

        Maybe in the long run we're seeing owning the whole system is the smarter move. I'm interested in what Microsoft is going to do next. I think Windows 7 will be a huge boon to them because enterprise IT departments are champing at the bit for a desktop OS refresh, but the future is in mobile. Another big win for the iPhone OS platform for Apple could spell trouble for Windows Mobile.
        • Maybe Common wisdom . . .

          is right, but MS rode the horse for too long, and forgot to watch the road ahead. They assumed with Vista that the Hardware upgrade curve would stay the same, and that people would be happy to just buy a whole new computer, and they were wrong.

          What I see is Apple being able to shut down Hackintoshes, and Psystar (and her eventual sisters) this way. If you can't build a system based off common components, then it becomes nigh impossible to clone it . . .
  • It would seem they want to stamp out cheap clones. (nt)

  • Gee....does that mean you won't steal OSX for your Netbook? Doubt it (NT)

    No More Microsoft Software Ever!
    • Won't steal OSX

      I hate to keep beating this horse but I don't get the concept of the
      Netbook. Anything smaller than the Mac Air or HP dv2-1030us is a
      waste of material. For people like me, they take away from my
      productivity. Wait let me say it this way. I have no interest in anyone's
      Netbook. They could sell for $99.99 and I still wouldn't buy one.

      And don't get me started on the Hackintosh Mini. If you want a small
      under powered device get the Dell or whatever and learn to live with it.
      How come no one has hacked the Sony Vaio Netbook? I guess the
      $800+ price tag was the deal breaker huh? Sony also has Blu-Ray

      Gee that felt good ... lol
      • No one hacks the Sony, because . . .

        Windows is already hacked. They want the software, not the hardware, moron. By switching to their own chips, Apple could shut this down almost completely.

        No OSX Netbooks (Other than their own?? ;) ).

        No more Psystars.

        No more Hackintoshes.

        And all without having to continue to look like the bad guy by going after little guys.

        • @JLHenry

          "By switching to their own chips, Apple could shut this down almost completely.

          No OSX Netbooks (Other than their own?? wink ).

          No more Psystars.

          No more Hackintoshes.

          And all without having to continue to look like the bad guy by going after little guys."

          Couldn't of said it better myself.
        • Mobile processors are being replaced not Intel

          I seriously doubt that Apple is even remotely looking at replacing the chips for the Mac.

          They are looking at ultra-low power chips for iPod, iPhone and whatever else they come up with.

          It would be near suicide from a cost standpoint to try and develop a competitor to Intel. Not only would that be a serious technical challenge but it is very cost prohibitive. Desktops and laptops need performance. Mobile devices need low-power, small size, reasonable performance, low-cost chips sometimes with special functionality.
          • @DevGuy_z

            Not necessarily a competitor to Intel. I see them still using the x86 cpu. I'm talking about North and South bridge. What if Apple made new chips to replace them? Then installing OS X on any plain jane pc would be very difficult.
  • Apple ROMs circa 2009

    It's hard to hack hardware . . .
    Roger Ramjet
  • Snow Leopard

    I predict Snow Leopard will be small enough to run on almost all their devices. They'll have a completely unified platform across the board so writing apps will be for all their products not just a phone/ipod or a pad or desk/laptop. They'd be smart to employ some API action that allows apps to be scaled to whatever device they're running on.

    It will also utilize GPUs (faster) rather than CPUs. This will make it VERY hard to install OSX on third party hardware. I suspect they'll keep a CPU in their pro machines so users can still run other OSes in parallel, but OSX will scream faster than anything else.

    Thus, they want to make their own chips.
  • Apple 100 chip designers wanted also hires Xbox director

    CNBC Jim Goldman comments on WSJ article and notes that
    in recession Apple is hiring lots of highly paid chip

    "But to discover that Apple is on a hiring binge and ready
    to spend big bucks in dozens, or more than a hundred,
    highly compensated chip designers -- even as almost
    every other tech company is laying people off -- and it
    warrants an also-ran mention in the body of a story."


    In other news Apple hires an Xbox director


    "Microsoft's Xbox strategy boss Richard Teversham has
    quit the company after 15 years to assume a new role in
    Apple's European offices related to education.

    For the past two years, Teversham has been Redmond's
    Director of Business, Insights and Strategy for Xbox,
    reporting directly to Vice President of Interactive
    Entertainment, Chris Lewis. Prior to that he held a director
    title overseeing the Xbox platform and marketing."

    It'll be more fun to have read that the Xbox guy was going
    to Apple to head a game division but who knows? Apple
    hired IBM chip expert Papermaster but because of non-
    competitive agreements Papermaster can't work on similar
    stuff in Apple for a few years (if I remember correctly).
    Maybe the Xbox guys after his non competitive agreement
    is over will move to gaming in Apple? (let's hope!).

    Before he went on sick leave Steve Jobs when asked what
    he'll do about the recession said that like the last recession
    Apple was just going to invest into it and guess they're
    carrying out the strategy (they've got 29 billion in cash).
    The recession hurts people and I'm not happy about it but
    from Apple's competitive point of view it might be good as
    many other firms have to cut back, example maybe a lot of
    new Android phone makers have cut or delayed their plans

    • @Davewrite

      In the 90's Apple lost a lot of talented people. Many went to work for MS. It was called Brain Drain. Perhaps with MS losing money for the first time, and all the bad press about Vista, stagnant stock, we'll start seeing MS with Brain Drain?
  • Planned

    OS X is the common factor in all of Apple's products now,
    not in the future. OS X is the basis for both the Macintosh
    and the iPod Touch and the iPhone. There is a different
    GUI for the smaller computing devices, but again, the OS
    is the same. That means creating some permutation of a
    netbook, such as the rumored iPad is a piece of cake. All
    Apple has to do is either tweak the iPhone GUI or simply
    port Snow Leopard onto it. Snow Leopard also has the
    advantage of not carrying any legacy OS with it. Smaller
    footprint, faster operation will be in order. Sorry PPC won't
    be included in the update, but hey, I can't run MacWrite on
    my MacBook either...not that I'd want to. Snow Leopard will
    be lean and mean. Not much by way of new features, but
    hey, aren't lean and mean features too? The point being
    porting Snow Leopard to a tablet or hand held will be
    easier than even now. Gosh, sounds like someone actually
    had a plan.
  • Can't wait for the iChip.

  • RE: Apple goes on the defensive: brings chips in-house

    Cannot say that they are on the defensive. Its just
    the way to fend off prying competitors. To be able to
    build a hi-fi computer, Chips is the most important
    Lets hope the in-house chip does not increase the
    Overhead cost of apple.