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My take of the iPad announcement

January 28, 2010 on 12:20 am | In Technology | No Comments

Well, it was finally announced today, the long rumoured Apple Tablet, the iPad. To be honest, I was quite disappointed. Mostly because of the price, but also by some of the underwhelming specs of the device itself (especially the iPhone OS part, lack of multitasking, and the continuation of the orphan button philosophy). But that’s not what this post is about.

The most interesting part for me in the whole announcement shebang is that the iPad runs an ARM powered system-on-chip (SoC) manufactured by Apple-owned P.A. Semi. I’ve wrote before about P.A. Semi when they announced their PWRficient processors back in 2007. The PWRficient was basically the only piece of silicon announced by P.A. Semi before being acquired by Apple in April of 2008. Now we’re hearing that the P.A. Semi designed SoC in the iPad around ARM architecture.

This, to me, is very significant in more than one way:
1- This is the first piece of silicon designed by Apple. This is a significant strategy shift from Apple that will go beyond the iPad. Entering the silicon design business is certainly no cheap endeavour and if Apple is to recuperate its investments it will have to sell a hell lot of chips to justify the investment.
2- Apple chose to ditch P.A. Semi’s PowerPC ISA in favour of ARM. Licensing an ARM core is certainly no cheap thing.
3- The SoC in the iPad also includes an OpenGL ES 2.0 Graphics Processing Unit (GPU) licensed from Imagination Technologies (which confirmed Apple as a licensee back in December 2009), another not-so-cheap thing.

These three notes amount to a significant investment from Apple in a market that is VERY competitive. ARM said that in 2009 there were 1.1 Billion devices shipped with an ARM powered processor. The profit margins for such SoC’s are already very low, and unless you manage to ship very high volumes it just won’t be profitable.

My bet is the next iPhone/iPod Touch will run the same Apple SoC we just saw in the iPad. Probably tweaked a bit for lower power consumption to cope with the stringent power requirements of a phone. This in turn, raises another question. What other changes will the next iPhone bring to make it the next hot item that everyone wants to get (including current iphone owners)? Technically, apart from the clock speed bump, the Apple A4 is very similar to the SoC in the current iPhone 3GS, so that won’t be enough to justify upgrading for must current 3GS owners. 4G is nowhere near seeing wide deployment this year, let alone having low power chipsets that are suitable for such phones, so it won’t be that. WiMax doesn’t have large market penetration, so that neither. CDMA is mostly irrelevant outside the US (and a few Asian countries, where the iPhone doesn’t enjoy the success it enjoys in the US and Europe). So, what will the next iPhone have to offer that will best the current 3GS???

But lets assume Apple manages to cram something that will make the next iPhone the must have item that the previous ones were, even if we assume 20M units sold annually, I don’t think it will be enough to justify the investment that went to develop this chip in house, not to mention manufacturing costs, instead of sourcing it from someone else (like Samsung, as in the previous iPhones). I doubt the iPad will see any success similar to what the iPhone is enjoying in terms of sales. The Apple A4 will have to go in many more high volume devices to be able to compete, in terms of cost, with sourcing similar offerings from Samsung, TI, or Marvell. With Apple being Apple, I doubt they’ll sell the chip to other companies for use in 3rd party devices.

So, what other Apple devices will we see that will use the Apple A4 to justify all the money that went into making this chip???

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