The success of the A4 chip has already spawned a new vertical that Apple will now cater to. According to reports on the New York Times, HP and Lenovo have already expressed their interest to bring the A4 chip to their netbook devices. As chip industry veteran Fred Weber remarks, “
”. With A4, Apple can now pose a significant threat to the likes of Intel, Qualcomm and Nvidia.
However, Apple 's major focus is likely to be in the way the semiconductor technology can be used inside its own iDevices. Late last month, there were reports that Apple could be
. However, the stakes are high in this case. According to the NY Times article, the cost incurred by companies in creating a smartphone chip from scratch can be close to $1 billion. And this is disregarding any direct investment in a factory since most mobile chips are made by contract foundries.
The high level of investments required to develop smartphone chips could mean that Apple will look to play on volumes to recover its capital. This would imply that A4 chips would then be made available to a range of non-Apple devices and also
, which we reported about yesterday, thus increasing the volume of chips sold, Apple could expect to retain the affordability of its own products. While this does make great business sense, it could also be a double-edged sword. The superior performance of A4 chips is seen as one of the unique selling propositions for the iPad. So making the technology available on rival products, Apple could also end up diluting the perceived superiority of the iPad and possibly
as well.
What are your thoughts on this? Do you see this as a problem for Apple ? Do let us know in the comments.