If we want to summarize the development trend of Apple in recent years, "control" should be the most appropriate one.
The best and most reliable supply chain has been gradually established in the world, and the iPhone, which accounts for almost half of Apple's revenue, has also become the annual technology vane and continues to lead the development of the industry.
▲ Tim Cook visited the Sony factory
If you think of them as a system, many companies have almost reached a "symbiotic" relationship with Apple. The iPhone has captured the market in the mobile phone market, and the related industrial chain is also flourishing behind it.
However, as the growth momentum of the iPhone slowed down this year, in order to maintain profit margins, Apple or Tim Cook also began to "reflect" on whether it spent too much money that should not be spent, and how to save the money.
Self-research is a good means, and at the same time, it can better "control" the development and production of iPhone, iPad, Mac and other products.
After the self-developed chip shines, Apple is preparing to expand the scope of self-developed chips, and is targeting WiFi and Bluetooth chips. Of course, the self-developed 5G baseband is still in full swing, and it is expected to be launched with the iPhone in 2025.
Replacing Broadcom could save billions of dollars a year
Unlike the baseband, Apple has not had too many conflicts with Broadcom, maintaining a relatively stable model of paying first and delivering first.
With the continuous growth of iPhone performance, Apple has gradually become a major customer of Broadcom. In the last fiscal year, Apple contributed 20% of Broadcom's revenue, totaling close to $7 billion.
Just after foreign media disclosed that Apple was planning to rely on self-developed WiFi and Bluetooth chips to replace Broadcom chips, Broadcom's stock price fell by 4.7%, which can be said to have lost a large order and market value.
At the same time, the 5G baseband, which was suffering from "research and development difficulties" before, may also be incorporated into the research and development process of WiFi and Bluetooth chips. Apple initially plans to only give the Apple chip team 2 to 3 years to allow the self-developed wireless connection chip to reach Industry top level.
It is not difficult to develop a self-developed Bluetooth chip. Apple has also used self-developed chips in AirPods and Apple Watch to achieve seamless switching and low latency.
The difficulty is how to bypass related patents for WiFi and radio frequency chips. Similar to Qualcomm, Broadcom has registered almost all relevant patents related to radio frequency, maintaining its leading position in the industry.
Broadcom CEO Hock Tan believes that Broadcom has the best technology and can continue to create value for customers.
There are even complaints about Apple’s attempt to replace Broadcom chips with self-developed methods, “There is no reason to find other things in areas that they are not good at”, which also implies that Apple is a bit self-inflicted.
Interestingly, as Broadcom's stock price fell, Qualcomm was also affected accordingly and also fell.
In recent years, Apple is working hard to develop its own 5G baseband to replace Qualcomm and save corresponding licensing fees. Even after acquiring Intel's baseband business for US$1 billion in 2019, it still failed to come up with corresponding products in a few years.
Similar to Broadcom's WiFi and radio frequency, for Apple, the difficulty is how to bypass patents. But the baseband still needs to cooperate with global communication operators to complete the frequency band debugging work on a global scale.
It is an extremely complicated and exhausting process to bring the self-developed base to the official mass production and launch. The repeated delays also indicate that Apple has encountered development obstacles.
But unlike Broadcom, Qualcomm has previously stated that they are ready to lose Apple's major customers. And Apple's goal for the self-developed baseband is also from 5G to 6G. Since 5G took a late bus, 6G will be the dragon and phoenix.
Continuous self-research, the ultimate goal is actually Apple under Tim Cook, who wants better "control" and ultimately maximizes profits. It is not even ruled out that after successful self-research, it will also benefit from patent licensing.
Apple wants to make a "three-in-one" chip
The baseband chip comes from Qualcomm, and the WiFi and Bluetooth come from Broadcom. In the early stage, Apple’s plan is to break through one by one. In the later iteration process, these three chips with connection functions will be integrated into one chip.
It is not ruled out that Apple's ultimate goal is to unify the package with the A-series and M-series chips to complete the grand unification.
Such a plan actually comes from Apple's sweetness in self-developed chips.
When Android's Qualcomm chips frequently overturned and became fire dragons, and when Intel lacked innovation and frequently continued life at 14nm, Apple relied on A-series and M-series chips to make iPhone and MacBook unique energy-efficient products in the market.
▲ New MacBook Air
For this reason, the market share of iPhone and Mac has also begun to increase, and Mac self-developed chips have also begun to "out of the circle", which has become a hot topic at present.
All this is due to Jobs’ layout for self-developed chips more than ten years ago, which can be roughly divided into recruiting and acquisitions.
At that time, Silicon Valley core-making giants were brought in, and the semiconductor company PA Semi was acquired, and finally Apple's self-developed chip team was established in Haifa, Israel.
As for the research and development of wireless connections and baseband chips, Apple also intends to cross the river by feeling the stones, either by recruiting people or acquiring them.
However, today is not the same as it was more than ten years ago. Top talents in the industry are gathered in top companies. Direct acquisitions are not impossible, but it is time-consuming and labor-intensive to bypass "anti-monopoly" investigations.
In November 2017, Broadcom planned to acquire Qualcomm at a sky-high price of US$130 billion, and this acquisition eventually turned into a soap opera, with one side lowering the price and the other raising the price.
In the end, Qualcomm approached the CFIUS (Committee on Foreign Investment in the United States), and finally US President Trump signed an executive order to stop the merger on the grounds of "national security".
Today, Apple has swallowed Qualcomm and Broadcom in one go. Funding is not a problem. The biggest problem is actually monopoly and anti-monopoly.
Mergers and acquisitions are not easy, so go the other way and pull people (attract relevant talents).
Apple set up an office directly in Irvine, recruiting employees with experience in wireless semiconductors. Irvine is also the office area of Broadcom, Skyworks and other companies.
As early as 2018, Apple was recruiting engineers in San Diego, Qualcomm headquarters, to promote its own baseband self-developed chip business.
Apple's approach is mainly to attract technical employees who are unwilling to work in Silicon Valley and Apple Park. Apple's self-developed chip department is not in the United States, but in Herzliya, Israel.
▲ Johny Srouji, Senior Vice President of Apple Hardware Image from: Bloomberg
In addition, Johny Srouji, who frequently appears at Apple conferences these days, is unwilling to go to Cupertino to participate in the recording, but prefers his own site (Herzlia). Every time he appears, there are all kinds of Various prototypes.
Casting a wide net and collecting more fish, even though Apple has tightened its recruitment plan at the moment, for these engineers, Apple's demand is far from being filled.
Difficulty, but Apple also has experience
Looking at the list of Apple's self-developed chips, in addition to the well-known A and M series SoC-level chips, Apple has also developed many functional small chips.
In 2016, Apple AirPods came out, leading a trend of true wireless, and also created a wireless empire.
In the following one or two years, there are few true wireless earphones that can be compared with it and have a similar experience, which is a distance ahead of other products.
Behind this reason is Apple's self-developed W1 chip, which is also Apple's first chip with a wireless connection, which plays a decisive role in the multi-device switching of AirPods and the low latency of dual earphones.
The follow-up of Apple's W1 chip, W2 and W3 are also used in Apple Watch, which also improves the efficiency of WiFi and Bluetooth.
From the Apple Watch Series 4 to the current S-series chips in the Apple Watch Ultra, an improved version of the W3 wireless connection chip is also integrated to optimize the connection performance with the iPhone and add support for Bluetooth 5.0.
At present, Apple is planning to apply this model to the iPhone, and the Apple Watch is worthy of being a test field for new iPhone technologies.
In 2021, Apple also developed a separate H1 chip for AirPods, which brought more stable and faster connection capabilities to AirPods 2, and realized the voice wake-up function of "Hey Siri" at any time.
The H1 chip itself uses a 7nm process, and its theoretical performance is not much different from that of the iPhone 4s, while the SoC performance of the iPhone 4s is comparable to that of an ancient Macintosh. In this way, AirPods is just like a small computer.
In addition to the H and W series chips on the headset watch, Apple also launched a U1 ultra-wideband wireless communication chip in 2019, introducing UWB, an indoor precise positioning function, into Apple's products to enhance the AirDrop experience.
In terms of wireless connection, Apple has successively launched three series of W, H, and U, and has also combined or upgraded according to functions, which can be regarded as seven years of layout.
This time, Apple intends to adjust the 5G baseband, WiFi, and Bluetooth to self-developed chips within a few years. One is because of the pursuit of profits, and the other is because it wants to better control the chips. All of this comes from its own Past successful experience.
However, for the iPhone, WiFi and 5G baseband are much more complicated, and they have to challenge RF chip design capabilities, connection stability, and how to bypass the patent pools of Broadcom and Qualcomm.
If Apple can come up with a set of self-developed chips that are close to Qualcomm and Broadcom, it will not only greatly reduce the cost of the iPhone, but also shake the status of the major chip manufacturers by itself. "Dragon" story.
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