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The phone you never saw

17/5/09

Women are brighter than men. One of the things that demonstrates this is that when you buy rubbish mens magazines they have 80 words to a page with lots of glossy pictures of mountain bikes, expensive watches and trainers. Womens magazines have 600 words to a page on why Jordan really cares or which diets suit which celebs. It’s every bit as vacuous but women are prepared to work that bit harder to extract the information. What both types of magazine have in common is the kind of article they run when they need to fill space. It’s “Ten things you never knew about..”. They will include six things you did already know, two that are opinion and two that are genuine. Thanks to the internet you can do your research in ten minutes and then nip down to Starbucks (womens magazines) or the pub (mens).

When newspapers have a slow news day they look for a new spin on an old story, so it must have been an especially slow news day this week when the Wall Street Journal  ran “In Major Shift, Apple Builds Its Own Team to Design Chips”. Not only is the headline wrong, the story missed the most important financial implication.

To start with it’s not a major shift. Apple bought PA Semiconductor in April 2008, and around this time ARM talked about having a new licensee. Confidentiality meant that they couldn’t say who but anyone who can add 0010 and 0010 will make 0100 and see that it’s PA Semiconductor they were talking about.

What the WSJ journalists did wasn’t “ten things you don’t know about the iPhone” but they did turn to searching on the internet and there they found that Apple was recruiting semiconductor experts on LinkedIn and other recruitment sites.

The story they missed was the effect that this will have on Intel.  Last October Intel took it upon itself to ridicule the iPhone because it had an ARM processor. This was an attempt to promote the Intel Atom which is being positioned in the mobile space. It was a clumsy attempt and Intel later apologised.

The danger for Intel lies in the past predicting the future. Apple switched from IBM and Motorola Power PC processors by porting the Mac OS to Intel. Or did they? Perhaps it was Intel which did the port in return for the design win. I’ve certainly heard tell that this was the case. They must find that a little painful because it was a jolly good port and it’s annoying not to be able to boast about what a good job you’ve done.

If Apple starts to become a chip manufacturer where do the chips go?

 Intel won’t get Atoms into iPhones or iPods. When we get things with 7 inch displays, things that would have been called Netbooks if Psion didn’t own the name, those will be Apple ARM powered too.  What about 11 inch? 15 inch? The desktop? The ARM roadmap has more cores, more third party support and much lower power overheads. In the server world the limitation on rackspace has become power and cooling.

The story that the Wall Street Journal missed is that Apple becoming a chip manufacturer is a nightmare for Intel, but then it wasn’t a story you can look up on the internet. Until now. I’m particularly disappointed by one of the reporters  Yukari Iwatani Kane, I’ve read a lot of her stuff and it’s usually great and insightful, and like I said: Women are brighter than men.

Cat Keynes publishes her thoughts on the mobile phone industry every Sunday at www.catkeynes.com you can read the column  the previous Friday by subscribing here. Follow me on Twitter here.
 


 

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