Apple's chipmaker buy: In your face, Google

Apple's Intrinsity purchase shows it will control its iPhone mobile platform from all the way from silicon to software

Apple has moved to strengthen its hold on the market for handheld devices by buying Intrinsity, a small Texas-based chip design outfit known for fast, low-power silicon.

The purchase is a classic Apple move, ensuring that the company controls its own mobile platform from silicon to software. And it's another skirmish in the developing war between Apple and Google, which recently purchased its own chip design firm. "Ultimately this is about control of its own destiny," say Dean McCarron, principal analyst of Mercury Research. "By acquiring this technology, Apple guarantees that it has the processor it needs, forces competitors to follow its lead, and decouples itself from the rest of the industry."

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Apple actually made the purchase, rumored to run about $120 million, about a month ago, but only confirmed it this week. It came as no particular surprise to chip analysts, who believe Intrinsity was responsible for much of the work on the core of the A4 chip that powers the iPad.

Earlier this month, Apple told mobile software developers in no uncertain terms that they would play by Apple's rules and use tools it approve -- or else. That move rightfully angered a lot of developers, but from Apple's point of view, it was a continuation of its determination to keep an iron grip on its platform. Buying Intrinsity is right in line with that strategy of top-to-bottom control.

Why Apple wants its own chip
Developing a mobile device poses a number of difficult problems, not the least of which are limited internal real estate and limited power. Intrinsity's technology speaks to both, and it offers a noticeable speed advantage over the competition.

First and foremost, a mobile device needs integration. There's simply no room for a plethora of off-the-shelf components, says analyst Nathan Brookwood of Insight 64. That's why a mobile-oriented chip such as Intel's Atom is more than a processor; it's a system on a chip, including graphics and memory controllers.

Rather than buy an Atom or its equivalent from someone else, Apple will use Intrinsity to build and integrate its own system on a chip and presumably outsource manufacturing to Samsung, says Brookwood.

Custom integration is expensive -- the price of the acquisition is only a piece of that -- and it takes a ton of volume to justify it. But now that Apple sells huge numbers of iPhones, iPod Touches, and iPads, the volume is there, and it makes a good deal of sense to pull silicon development inside, he says.

There's another competitive benefit: By owning Intrinsity, Apple has a guarantee that key features of the technology won't go to a competitor. As one example, Intrinsity-designed chips can run at up to 1GHz, more than a third faster than the 650MHz speed of some competing chips, analyst Tom R. Halfhill of Microprocessor Report told the New York Times. However, other ARM-based designs, like Nvidia’s Tegra II are also hitting the 1GHz mark, notes Brookwood.

Google's mysterious play for an Apple-connected chip firm
Making the Intrinsity buy all the more interesting was Google's purchase last week of Agnilux, a chip design shop filled with former Apple engineers. One reason those engineers are there is because Agnilux spun out of PA Semi, yet another silicon design firm that was purchased by Apple in 2008.

Given the skill sets of the personnel at Agnilux, it's not a huge stretch to think they could be designing a low-power processor optimized for Google's Android platform, says Brookwood. Or they may be working on low-power server technology for Google, a company that uses thousands of servers. Agnilux has always been secretive about its mission, and until someone reverse-engineers a product containing an Agnilux processor, we won't know for sure.

But Apple's strategy is transparent. The company that controls the software and controls the hardware controls the user experience. That's not always great for developers, but over the years it has worked out very well for Apple. And with Google taking aim at Apple's share of the smartphone market, the strategy and the acquisition make even more sense.

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This article, "Apple's chipmaker buy: In your face, Google," was originally published by InfoWorld.com. Read more of Bill Snyder's Tech's Bottom Line blog at InfoWorld.com.

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