Apple Turning To Chip Design For Its Innovation

Apple's plans for all this design power are likely to revolve around video and power consumption, and will boost the company's desire for secrecy.
Design, whether it's chips, computers, or smartphones, has always been Apple's strength, so its current expansion makes sense. "It's exactly the kind of business Apple likes to be in," said Ezra Gottheil, analyst for Technology Business Research. "It's an intellectual property business that's human intensive, not capital intensive."

Reducing power consumption and smoother playback of video games, movies, and other content would likely be a focus of Apple chip designers. "Video is important to them and that would certainly be a space that they could play in," Gottheil said.

For example, Apple could decide to build its own Adobe Flash-like player tied to its own hardware. Flash is a Web technology used today to play much of the video on Web sites, including YouTube. Apple, however, has never been happy with the technology's performance on mobile devices, Gottheil said.

However, it's hard to predict how successful Apple would be as a full-fledged chip designer, as opposed to a company that works with suppliers to make customized technology.

"We'll have to see how talented their design team is," Baker said. "It's a whole different skill set, so from that perspective, I'll have to take a wait-and-see attitude."

An Apple representative was not immediately available to comment on the company's future design plans.

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