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With iPhone In Mind, Apple Buys Chip Maker

Apple has acquired PA Semi, microprocessor design firm for $278 million in cash, reports Forbes’ Erika Brown. PA Semi was started by Dan Dobberpuhl, a chip designer closely associated with Alpha and StrongARM chips developed by Digital Equipment.

The decision to center the iPhone design around a chip that Apple could own marks a significant strategic choice by Apple Chief Executive Steve Jobs, and is aimed at ensuring Apple can continue to differentiate its flagship phone as a raft of competitors flood the market. According to a source affiliated with the chip company, Jobs and Senior Vice President Tony Fadell led the tiny group of executives who spearheaded the acquisition, which included negotiations that took place in Jobs’ home.

Apple’s decision is going to post a problem for Intel Corp. and its newly announced Atom chip. It is unlikely that Intel’s chip was going to find room in the handsets made by some of the larger players. [digg=http://digg.com/apple/With_iPhone_In_Mind_Apple_Buys_ChipnMaker]

Chip industry insiders believe that Intel was betting on an Apple win to gain scale for Atom which in turn would allow it to dominate the “portable internet device” market. iPhone and iPod Touch are the early leaders in the PID category, and are unlikely to cede that spot for near foreseeable future.

PA Semi had designed a 64-bit dual core chip that consumer between 5-to-13 watts running at 2 gigahertz, making it a good chip for the PID category. So far, PA Semi has found takers in telecom equipment makers.

Beyond3D puts context on the news announcement. While they are mostly right about everything, I don’t think you can rule out the iPhone argument.

23 Responses to “With iPhone In Mind, Apple Buys Chip Maker”

  1. Since they do maintain an os for both intel and powerpc processors, I would not be that surprised if they come up with something nifty powered by that chip.

  2. Om, IMHO Steve Jobs figured he must try everything to lock out competition on the hardware/cloning front.

    Jobs does not want to see a Compaq <-> IBM compatible PC scenario developing again.

    Jobs wants to move back to (now their own) PowerPC chips COMPLETELY (if possible)

    Will this work? The chances are very low, but if this works out Jobs is The Man again.

  3. “Consuming 5-13 watts” – that is a power hug, even for mogile market.
    Current mobile chips consume less then 5W idling, Atom consumes a fraction of that. At 5W consumption your battery life on PID will be a joke.

  4. Actually Om, I was trying to correct the words you used or omitted. Looks like you used spell check, but didn’t reread before posting.

    Sorry if I came off as a grammar Nazi/jerk.

  5. Klaus

    you are right but I think they are acquiring the team and they are going to do their own tweaks in order to make chips that work best for their PID devices, aka iPhone. They are acquiring a pretty nifty team of chip heads who are lowering power consumption.

  6. Apple’s decision is going to pose a problem for Intel Corp.

    … are unlikely to cede that spot for the near foreseeable future.

    … core chip that consumes between 5-to-13 …