If you’ve been getting my newsletter for a while now, you may remember a blog I posted on PDMA in June of 2008. I had pondered why Apple would go and buy a company called PA Semi that made low power chips. While not entirely correct, I did feel the thrill of coming pretty close to nailing Apple’s strategy once the iPad was announced on January 27. Apple has created its own processor chip for the iPad (terrible name…what were those brilliant marketing geniuses at Apple thinking?) and thereby created a walled garden around its newest product. But is it unassailable?
In Apple’s quest to create a compelling product that no one else could duplicate, it has taken on new headaches related to chip design and manufacturing. While PA Semi appears to have given Apple a jump start on chip design, it remains to be seen if Apple can provide enough R&D resources to keep the performance up to snuff. Even more concerning is whether Apple has the competency to handle the complexities of chip manufacturing. Dealing with contract manufacturers to qualify and ramp manufacturing can cause nightmares and many sleepless nights. These are things it didn’t have to worry about when Intel took care of all the design and manufacturing.
The pundits are taking sides as to whether the iPad will be a market winner. Apple has had much success recently with its new products, and I’m sure it will with the iPad. But what I really want to see is if Apple can successfully manage its new foray into chip design and manufacturing. Right now your guess would be as good as mine.
