Apple's Custom iPhone Chips Would Hurt Samsung

7 Comments

Yesterday the New York Times reported that an engineer’s LinkedIn profile appears to confirm that Apple will make its own application processors for the iPhone — something long suspected after Apple purchased low-power chip firm PA Semi and got a license to tweak the ARM mobile core. Such news might cheer Apple enthusiasts, but it’s grim for Samsung, the provider of the application processor in the iPhone and the No. 3 applications processor company, according to iSuppli.

Samsung has its own license to the ARM core — which is a specific chip architecture designed for low-power applications — but isn’t a large player when it comes to the brains running the latest generation of smartphones. Wireless chip firms such as Qualcomm and Texas Instruments (the No. 1 applications processor provider) build their mobile application processors on top of ARM cores as well.

Ironically, many of the more notable Samsung phones, including the Instinct, use a Qualcomm applications processor because the Samsung’s handset business tends to use integrated platforms that contain the brains and the communications capabilities of the phone on the same platform, rather than separated as the iPhone does. Samsung doesn’t release market data for its mobile applications processors, but analysts say an Apple loss would be significant as Samsung looks to grow its high-end mobile applications processor business. Even though it will take years to design and certify new chips for Apple’s products (likely until late 2009 or 2010 at the earliest), such a loss will sting Samsung.

7 Comments

Michael Teuber

Eric, as the impact, if any, would not be felt for some time, it is not the 10 million iPhones already sold, or the 45 million iPhones in production for the next 12 months, but the iPhones sold in the 2010 fiscal year that would be involved.

As to how Samsung would be affected, if, as you say, nobody has Samsung’s numbers then we don’t really know how this will affect them. However working from the ‘more business is better than less’ premise, it would not be a good thing anyway.

Samsung has no problem selling iPhone-alike Instincts which may ‘hurt’ Apple just as much as custom ARM chips ‘hurt’ Samsung.

Eric in Cupertino

I was under the impression ARM is the most common CPU currently. Yes?

Do 10 million ARM CPUs in iPhones really mean anything compared to a volume of billions?

Nobody has Samsung’s numbers so we can all dream up random ideas?
What sort of impact would this have on Samsung?

I think whatever CPUs Samsung uses on American CDMA devices is meaningless. What’s the volume of Samsung’s ARM CPUs in GSM devices in Asia? What devices are China Mobile and Vodafone selling which use Samsung ARM chips?

Constable Odo

Plus, Samsung will soon be acquiring SanDisk, so Samsung should definitely have it’s hands full and not need to worry about what little business they lose from Apple. With the Android Platform coming out soon, they’ll get more business from other handset manufacturers. No need to cry over Samsung.

Allen

This may hurt their ARM product line, but given the size and diversity of Samsung’s business, I agree, this will “sting” Samsung like a mosquito bite.

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