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SAN FRANCISCO – Apple’s A4 chip, unveiled as part of its iPad, shows how Chief Executive Officer Steve Jobs is extending control over the company’s hardware at the expense of Qualcomm and Intel.
Instead of buying an off-the-shelf part, Jobs had Apple’s 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, Ariz.
“He wants his own ecosystem and doesn’t want to be beholden to anyone,” Strauss said in an interview. “It’s both maximizing his margins and maximizing his control.”
Apple’s 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, Ariz. 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.
Intel, the world’s 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 smart phones.
Goldman Sachs 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 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.
“IPad is powered by our own custom silicon,” Jobs said at the iPad’s introduction. “We have an incredible group that does custom silicon at Apple.”
Steve Dowling, an Apple spokesman, said the company wouldn’t comment beyond Jobs’ remarks and information on the company’s Web site. Apple’s Mac computers run on processors made by Intel, whose chips power more than 80 percent of the world’s PCs. The iPhone uses a Samsung Electronics Co.-manufactured processor that was partly designed by Apple engineers, Rebello said.
