New ARM Chips Cause Internet Forum Wars – Could Hurt Intel Badly

Depending upon who you believe (and me being me, I believe nobody), Apple may be designing their own CPU, based on ARM technology. Apple has a job posting for a CPU designer on the Mac side of the business. Seriously. The Mac side. This has caused a lot of excitement in forums across the internet.

Curiously I’d predicted an Apple move to ARM for Notebooks a while back. Wonder what took everyone else so long…

But it would make sense for Apple to do their own chip design:

  1. They’ve had problems with chip designers in the past (IBM, Motorola)
  2. They don’t have to do all of the work, ARM Holdings has already done most of it.
  3. Current MacBooks run hot, which is bad for your sperm count.
  4. Intel chips are expensive, ARM chips are a lot (75% to 95%) cheaper.
  5. The ARM A15 Cortex due in 2012 is as powerful as the current Core 2 Duo.
  6. Talking about cost savings, you’ve just halved your battery size.
  7. Oh, and now the MacBook Pro 13“ weighs the same as the current MacBook Air.
  8. Oh, and now the MacBook Air weighs the same as the IPad.
  9. Oh, and ARM Holdings was founded by Apple and Acorn in partnership.
  10. Which means that Apple already holds an ARM License.
  11. For that matter, Apple gets a cut of every ARM License sold. Bet that makes a lot of ARM licensees tremble with joy!

Just because there are strong arguments in favor of this sort of move, doesn’t mean that Apple is actually going to do it. The X86/X86-64 family of chips is a very good general purpose CPU line. The basic architecture has stood the test of time better than the original Intel engineers ever thought it would when the 4004 chip was being designed back in the late 1960s.

It also helps that Apple has three choices for X86/X86-64 CPU supplier, Intel, AMD, and Via. Even if Apple has no intentions of buying AMD or Via CPU chips, they’d still be in close contact with those companies, in case Intel decides to do something that Apple doesn’t like. It’s called having alternatives. Besides, there’s always the chance that AMD or Via may develop an X86-X86-64 variant that Intel can’t match until they reverse engineer it. Remember the Opteron?

And Apple is already buying from AMD. They’ve pretty well dumped NVidia graphics, and AMD has been the beneficiary. AMD of course wants to keep Apple happy. Apple is a brutal customer to deal with, yes. But they are a premium customer. They don’t buy cheap junk, even if they expect to get top of the line parts for a 90% discount. And they sell a lot of kit. So even if the margins are low, sales to Apple help push the total volume higher, which lowers costs.

Intel isn’t happy that Apple is spending so much money on AMD graphics, Intel would rather have Apple buy from them. And Apple is talking to Intel about graphics chips. Intel’s problem is that they don’t have anything competitive today. And they won’t have anything competitive tomorrow. Maybe in 2013 they might have something, but that doesn’t help Apple now.

And all the while, Apple is playing the three X86/X86-64 CPU makers off against each other. This is smart business, it drives their component costs down.

Tossing ARM into the mix would allow Apple to really push Intel, AMD, and Via on CPU pricing. Currently Apple is paying between $100.00 and $300.00 per CPU and chipset from Intel (my estimate based on information published by SemiAccurate, AnandTech, TechEye, Apple Insider, Intel, AMD, and several other sources). By going to their own ARM design, Apple could drop their CPU/Chipset cost per unit to the $30.00 to $100.00 range, or to about a third. Or they could blackmail Intel into selling below cost, to maintain market share…

And we know that Apple is quite capable of deciding to nuke a market. Everyone predicted that IPad pricing would start at $999.00 per unit. Except me. I predicted $500.00, and Apple came in with a price of $499.00, completely killing the existing tablet market, and eating into the NetBook/NoteBook market.

So why wouldn’t they push Intel into a corner for better pricing?

Don’t forget. Apple is a corporation. Corporations aren’t loyal. Corporations aren’t moral. Think of a sociopath on steroids. That’s Apple.

Besides, Apple likes lock in. Think of the IPhone, IPod, and IPad lines, where the OS you get, is what you put up with. In fact in many countries it’s illegal to try and change the OS on those three products, because of laws like Bill C-32 in Canada, and the Digital Millennium Copyright Act in the United States. Yes, recently it was decided that you could legally jailbreak your IPhone, but that doesn’t affect the IPad or IPod Touch. By going ARM, and using Technical Protection Measures, Apple could lock in their OS on the MacBook line as well!

Again, corporations are sociopathic by definition. The only thing that matters is profits. Oh, reputation also matters to a certain extent, especially to a consumer electronics firm. Unlike Microsoft, Apple knows this, and that may stop them from trying for lock in. May.

My guess is that Intel will be living in Interesting Times.

Regards

Wayne Borean
Saturday January 1, 2011

Report: iPad will grow 250% in 2011 at the expense of PCs
Apple to expand CPU design group beyond iPad A4
ARM Aims at Intel, Cortex A15 Headed for Smartphones, Notebooks and Servers
Evidence points to Apple designing ARM laptops
Possible Future Tectonic Shifts In The Electronic Industry
Will 2011 See An Earthquake Hit The Server Manufacturers
The Death Of The NetBook

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