Apple
Instead of buying an off-the-shelf part, Jobs had Apples engineers design the A4 chip, giving them influence over its cost and functions, said Will Strauss, an analyst at Forward Concepts Co., a researcher in Tempe, Arizona.
“He wants his own ecosystem and doesnt want to be beholden to anyone,” Strauss said in an interview. “Its both maximizing his margins and maximizing his control.”
Apples decision to design its own part is a blow to Intel, which is trying to win a foothold in mobile devices with its Atom product, said Jim McGregor, an analyst at research firm In- Stat in Scottsdale, Arizona. Apple will probably use a version of the A4 in future models of the iPhone, he said.
“Every step that Apple has taken, from the iPhone to the tablet, has been directly in the sights of Intel, and where it has been wanting to go with Atom,” McGregor said. “Intel has been completely rebuffed.”
The iPad, a touch-screen tablet computer, will go on sale by March, Jobs said at the Jan. 27 debut of the device.
Apple, based in Cupertino, California, rose $2.67 to $194.73 yesterday in Nasdaq Stock Market trading. The shares have fallen 7.6 percent this year. Intel, down 3.9 percent in 2010, increased 21 cents to $19.61, while Qualcomm gained 58 cents to $39.77.
Small Market
Intel, the worlds largest chipmaker, and Qualcomm, the largest maker of chips for phones, are trying to create a new market for devices that bridge the gap between computers and smartphones.
Goldman Sachs Group Inc. estimates that Apple will sell 6 million iPads this year. By contrast, the market for mobile phones will reach 1 billion units and PC sales will be about 300 million. Still, the iPad is a high-profile attempt to crack a market that Qualcomm and Intel have set their sights on, said Jagdish Rebello, an analyst at El Segundo, California-based research firm ISuppli Corp.
“Intel would have wanted to get into this device, Qualcomm would have wanted to get into this device,” Rebello said. He also expects Apple to use the A4 in future models of the iPhone.
Nice Job
Steve Dowling, an Apple spokesman, said the company wouldnt comment beyond Jobss remarks and information on the companys Web site.
Apples Mac computers run on processors made by Santa Clara, California-based Intel, whose chips power more than 80 percent of the worlds PCs. The iPhone uses a Samsung Electronics Co.-manufactured processor that was partially designed by Apple engineers, Rebello said.
“Apples done a nice job innovating with their vertically integrated device,” said Bill Calder, an Intel spokesman. “But we remain confident that the Intel architecture will fuel broad growth in a wide range of intelligent devices from tablets to smartphones.”
At the Consumer Electronics Show in January, Intel announced that LG Electronics Inc., the worlds third-largest phone maker, will use one of its processors in a new smartphone to debut this year.
Qualcomms Snapdragon
Qualcomm, based in San Diego, has held talks about supplying products for use in Apples iPhone, Chief Executive Officer Paul Jacobs said in an interview in November. At CES, Qualcomm said computer makers Hewlett-Packard Co. and Lenovo Group Ltd. will make scaled-down laptops that use its Snapdragon processor.
“We are very excited about the opportunities in the mobile computing space,” Bertha Agia, a Qualcomm spokeswoman, said in an e-mail. “Qualcomms Snapdragon platform has 15 manufacturers that are developing more than 40 Snapdragon-based products.”