Apple’s 64-bit ARM business on track to replicate now-hapless Intel’s x86 model

“While most analysts continue to focus on the battle between Apple (AAPL) and Samsung (OTC:SSNLF) in the smartphone and tablet market and much more interesting strategy is taking place with Apple’s ARM (ARMH) based processors,” Ed McKernan writes for Seeking Alpha. “The 64-bit A7 processor has elevated Apple into not just a premium consumer position but also as the leader in the corporate space that is about to turn into an adoption wave.”

“Intel (INTC), trying to protect its 64 bit PC Mobile positioning, purposely downplayed its 64 bit capabilities in the tablet and smartphone space in order to allow ultrabooks to get a head of steam. Apple gladly picked up the baton as the premier 64 bit architecture for mobile and thus imprinting the image of mobile processor leadership to not only its faithful followers but to the broader world market,” McKernan writes. “Superior branding will now ripple all the way through to the worldwide Fab Footprint games underway as noted by the Apple – Samsung connection with Global Foundries new Malta Fab in upstate New York. More importantly the pieces are in place to replicate the highly profitable Intel x86 model built in the 1990s.”

MacDailyNews Note: Ed McKernan is a semiconductor Veteran with 20+ years of experience at Intel and several prominent startups including Cyrix and Transmeta.

“With its 64 bit ARM roadmap about to expand, Apple has the luxury of building larger die that stretch the performance curve upward and in synchronicity with process technology improvements. Each increase in performance and capability will be effectively driving into the heart of Intel’s PC mobile processor roadmap that are sold at premium prices of $200 and more,” McKernan writes. “This profit can be absorbed by Apple if they are able to embed these ARM processors into mobile platforms that can replace PCs in most corporate environments. Logically the next platform to do this would be an iPad “Pro” with a larger screen and wedged in Apple’s lineup between the Mac Air and Mac Book Pro.”

“If Apple is able to receive a premium for its iPad Pro next year due to a more advanced A8 processor and thus effectively migrating not only the Intel ultrabook PC but also the $200+ Broadwell ULV processor residing inside it over to its side of the ledger, then we will have witnessed the beginnings of the transition to the premium ARM market under the tutelage of the one licensee who is more than just a fabless player,” McKernan writes. “With its increased profits, Apple then surely will fund the treadmill in mobile that will keep them in the pole position for years to come. In addition, coming soon is likely a 64 bit server design that will allow them to replicate the feat with an efficient processor designed to replace $2000-$6000 Intel Xeon processors that will run their iCloud. Google (GOOG) and Amazon (AMZN) are you listening?”

Read more – highly recommended – in the full article here.

25 Comments

    1. This is just the beginning to Steve Jobs overall long-term plan; that being to not only dominate the mobile space but to also have Apple independent of suppliers and making their own (entire) hardware and software. Great insight Steve Jobs. May his soul rest in eternal joyous peace as he watches his master plan slowly coming to life.

      1. I won’t be convinced until I see ten Apple-branded satellites in orbit.

        If Apple truly wants to become autonomous they will have to find a means to deliver the online shopping experience in the same manner DirecTV supplies a media experience.

        The real differentiator will be hardware & software working with these satellites to keep government agencies and corporate spies from stealing data.

        1. I’m assuming you mean Apple’s own satellite internet service. If so …. then you’ve never used a satellite internet service. It sux beyond belief, and there’s nothing Apple or anyone else can do about the speed of light.

          1. speed of light (latency)…or signal-to-noise (SNR) downlink from a geosynchronous satellite or weather effects or the need to precisely point to a specific location in the sky. Then there is the problem of the wireless uplink path for the internet service….

          2. What the hell do you know about sat comm, other that Dish or DirecTV? Do you have any other anecdotal evidence than your exposure to commercial satellites?

            I have experience in military-grade sat com application and I’ve never experienced the crap you guys are talking about. Voice comm is latent but data transmission is something completely different.

            iBeacon is just the beginning.

        2. If it’s satellites… it will be slow. Geosynchronous satellites are REALLY far away. About 36,000km away. Consider that the earth’s diameter is only about 12,000 km and you get a sense of why transmitting data through satellites is SLOW. Can you imagine the ping times?

    1. There is none. But just because you don’t see it (vision) doesn’t mean there isn’t a battlefield in their future.

      Each new 64-bit iOS device from Apple is a lesson learned and, not only is it one less sale for Intel but it further justifies Apple’s encroachment into Intel’s field of expertise; proving Intel has been dragging their feet because they missed an opportunity, just as Microsoft did with the whole internet thingy.

      1. Same thing happened to IBM and Motorola when they could not supply Apple (Steve Jobs) with the low powered 68XXX chip. Steve was using the Intel chip at NeXT and OS X ran on Intel chips. There was no reason to stay. Apple moved on.

        When Apple purchased PA Semi, Intel should have seen the righting on the wall. Steve Jobs got control of the core of his products and devices by making the CPU. Intel will be discarded too!

      2. One reason for making their own chips is to distance themselves from the competition. They’re not about to sell their chips to a competitor. It’s be like Intel selling chip designs to AMD.

      3. The competition with intel already exists…Atom vs. ARM. The Atom processor is a product without a real home. It had a home in netbooks, but netbooks had no practical purpose. It turns out that they were a false step on the way to the iPad, which has more portability, a better OS, a better display, more battery life, and a better user interface. Atom is not powerful enough to be a good alternative for laptops or desktops, but not sufficiently power-efficient to be a player in the smartphone or tablet markets. In terms of volume, ARM is ascendant, and that poses a real threat to the future profit outlook of intel.

  1. And yet, know one sees. Or understands. Numerous solar powered server farms all around the world. Yet, know one is looking. Apple is buying up item after item of the products that they use or install in their products and devices along with the IT rights and patents. The A7 CPU, the glass, the OS, the on line stores, the endless ability to move data from server farms know one is looking at, …

    One day they will make a movie about this takeover by one company. Steve would be proud of what Apple will become. Soon, very soon!

  2. I was thinking about Apple vs Intel a couple weeks ago. The strategy is not to battle Samsung or the tablet market but a much bigger target and that is Intel – it’s the processor, stupid. This is absolute brilliance. Don’t know who gets the credit, Steve or Tim, but right now it’s Tim’s Apple.

  3. You’re all pissing in the wind.

    Intel is readying production capabilities for ARM chips. That’s already old news. Manufacturing ARM tech for Apple is going to be the next big thing at Intel

    1. Yes, but they would only be functioning as a fab for Apple’s designs, which means much less profit to Intel.

      I actually look forward to Intel doing this for Apple, as they are the only other option for Apple to eventually move away from Samsung to manufacture next generation processors. The key knowledge (that Apple would care about) is in producing the semiconductor die, not the architecture. Intel can compete with Samsung in transistor and die size. Intel’s next generation x86, Broadwell, will be 14nm process in 2014 and then Skylake will be 10nm in 2015+.

      This matches up with Samsung’s roadmap, with the next generation Exynos in the S5 to be 14nm process as well.

      Apple desperately needs Intel to do contract fabrication to get away from Samsung.

  4. Intel chips have been historically slow on floating point calculations. That is why in the 90’s real number crunching workstations used MIPS, SPARC, or DEC ALPA’s. Now Cray uses high end Opteron’s (even though they double your cooling bill). Maybe ARM can come up with something better.

  5. I think it is Apple who is pulling the strings of its puppet Samsung in regard to ARM 64-bit SOC fabrication. I would guess that Apple has intimated to Samsung that Apple will switch to Intel unless they get a good bargain. Intel already has a license to fabricate ARM 64-bit CPUs as announced in October for Altera, http://www.forbes.com/sites/jeanbaptiste/2013/10/29/exclusive-intel-opens-fabs-to-arm-chips/. The fact that Intel just announced the Altera contract last month and Apple choosing the Global Foundries NY plant this month just proves this. It is obvious that once Samsung loses the 64-bit manufacturing contract to INTEL, they will be left in the dust by the manufacturing efficiency of INTEL. Apple understands this very well, they can extract major concession from Samsung. It’s tough being Apple’s biatch! Wth this development also, Eventually, I foresee Samsung paying APPLE for the infringed IP rights for the galaxy and note series smart phones and tablets .

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