Way back when, back in the previous century, CPU designs were all the rage. Intel and Motorola. IBM and DEC. Those chipmaking giants spawned a large cadre of employees with great chip designer skills and experience.
Years later Apple bought one of them. P.A. Semi (think Palo Alto Semiconductor, a fabless chip design company founded by the lead designer of the DEC Alpha and StrongARM CPUs) and a few years later Apple’s iPhone showed up with an in-house design based on the ARM processor. Almost overnight, Apple became a chip designer powerhouse, a giant among few.
After the P.A. Semi purchase, Apple’s iPhone became more powerful than CPUs in Android smartphones and tablets, and then showed up as the driving force in the iPad. Apple was in the chip business.
Let me add a brief sidebar to the news that Apple is one of the world’s chip giants– both in design and manufacture, and in purchasing chips. Think of it this way. Apple Intel CPUs these days, perhaps as many as 20-million per year now, and we’re coming up on 10 years of Intel Inside the Mac. Let’s say Intel in the Mac averaged 3-million per year. That’s more than 30-million Intel CPUs; and not the cheap and underpowered variety. Apple uses mostly high end CPUs from Intel in the Mac.
That’s just the Mac. Wait’ll you see what else is coming.
To date, Apple has sold around 1-billion iPhones, and the majority of those since the company introduced the iconic smartphone with its own A-series, Apple designed CPUs. 30-million Intel CPUs in the Mac in a decade? How about almost a billion Apple designed CPUs in the iPhone and iPad in the past decade.
Apple is a chip giant.
So is competitor Samsung, which had made numerous chips for Apple, including the A-series CPUs designed by Apple. Samsung also makes Qualcomm CPUs, so Apple’s nemesis is a chip manufacturing giant and makes CPUs that compete with Apple’s own CPUs.
Chip giants? Intel, obviously. Samsung, of course. But also Qualcomm and Apple.
One of the key components to successful product marketing is differentiation. Apple achieves full and obvious differentiation from Windows PC makers with the Mac. Yep, Intel Inside, but macOS Sierra, sterling design aesthetics, higher quality components, mean the Mac remains a premium, desirable personal computer that performs well against all competition, to the point that Apple takes home the lion’s share of the industry’s profits.
What about the iPhone and iPad? Again, differentiation is key. Both devices are differentiated by Apple’s own homegrown A-series CPUs which outperform Android-based devices, and by iOS, a uniquely designed operating system stolen by Google to form Android. As with the Mac, Apple differentiates the iPhone and iPad with a custom designed CPU/GPU combo, and the operating system, to form an attractive, safe and secure, user environment.
Obviously, Apple is not done with chip designs. Apple’s chips are found in the new AirPods, in the new MacBook Pro models, and in Watch, so further differentiation becomes chip-based, rather than design esthetics. Apple buys chips, too.
Every Mac, iPhone, iPad, and Watch contains a CPU– designed by Apple, farmed out for manufacturing elsewhere– random access memory chips (RAM), and flash storage– the solid state storage medium that is replacing hard disk drives across the planet. In the past 10 years Apple has sold nearly 1.2-billion devices; iPhones, Macs, iPads, Watch, Apple TV, and now AirPods, which makes Apple one of the world’s preeminent chip design houses, and a huge customer for those who design and build SSDs and RAM.
Apple is a chip giant, folks. Not many are bigger or doing more in the industry.