Apple

Intel has emphatically denied a report that Apple is planning to use its Atom processor in a future version of the iPhone.

Don't expect to see an Atom-based iPhone anytime soon.

(Credit: CNET Networks)

On Wednesday, our sister site ZDNet.de reported that the head of Intel's German operations told reporters that Apple was planning to use the Atom chip in a larger version of the iPhone, due out at some future date. ZDNet.de has since amended its article to say that Hannes Schwaderer was only referring to the possibility that Apple might use Atom in a future Mobile Internet Device, not the iPhone.

An Intel representative in the U.S. used words I'm not allowed to print in this space to describe the report, but let's just say that farm animal byproducts were prominently involved. Apple, of course, is notorious for demanding radio silence on future products from its suppliers, so it's not surprising that Intel would move so quickly to squelch the rumors.

But Atom in the iPhone just doesn't make sense, at least right now. The chip gives off way too much heat to be used in a device as small as the iPhone. Intel has a future generation of Atom in the works called Moorestown that might be able to reach the power consumption goals needed for mobile phones, but that won't arrive until 2009 or 2010.

Apple might have Atom in mind for some sort of minitablet device running OS X, as persistent rumors have suggested, but the iPhone won't be using Atom anytime soon.

In what might be a high-profile case of career suicide, an Intel Germany executive has reportedly confirmed that Apple plans to use Intel's Atom processor in a future iPhone.

The report, from our sister site ZDNet.de, is in German. I don't speak German. Google's translation service says "As part of an Intel-Events for the 40th Birthday semiconductor company BMW in Munich, Germany-World's managing director Hannes Schwaderer today confirms what has long been a rumor on the Internet kursierte: namely, that there is an iPhone with Intel's new nuclear-chip type." Atom, in the German version, is spelled the same way as the English word, so I think it's safe to assume that "nuclear-chip type" means Intel's Atom processor. I sent an e-mail to the author of the report hoping to get an official English translation.

Rumors about Apple deciding to throw all of its eggs into Intel's chip-making basket have been persistent ever since Intel started talking about its Silverthorne processor, which is now known as Atom. The problem is that the current generation of Atom is not quite right for smartphones like the iPhone: it gives off too much heat to be practical in a device the size of the iPhone.

The report says the Atom-based iPhone would be larger, and uses the reference design for a mobile Internet device that Intel created for its Fall Intel Developer Forum. That design was a mockup of what MIDs using the next-generation of Atom, code-named Moorestown, might resemble, rather than an actual product blueprint. A switch to Intel's chips is certainly possible for an iPhone released around the 2009-2010 timeframe expected for Moorestown, and it's also possible that Apple has an Atom-based tablet-like device in the works, but it's far from clear.

An Intel representative said he was looking into the report, but doubted that the Intel executive had actually confirmed such a plan, or even whether the executive in question--who is head of Intel's German operations--would even be aware of such a thing, assuming it existed. Throw another log on the iPhone rumor pile.

Apple has reportedly made a rare acquisition, snapping up low-power chip company PA Semi one day before reporting its quarterly earnings.

Forbes reported late Tuesday that Apple has agreed to purchase the company for a middling $278 million, quoting Apple spokesman Steve Dowling as confirming the deal. PA Semi made its debut a few years back designing low-power chips based on Apple's old friend, the Power architecture.

It's not clear what Apple might have in mind for PA Semi. I'd doubt Apple plans to get into the chip design game anytime soon, although having low-power chip experts on board would only help any company eyeing the next generation of mobile computing as clearly as Apple is doing at the moment. Forbes intimates that Apple is planning to put PA Semi's chips in the iPhone, which doesn't make any sense whatsoever at first glance.

PA Semi's chips are based on IBM's Power architecture. The iPhone uses a Samsung chip based on ARM's instruction set. It would seem quite a stretch that after just a year, Apple would find it necessary to port the iPhone's OS X operating system over to Power based on some supposed failing with ARM's low-power road map. If Apple was going to make any kind of porting move, it would have been much more logical--if not a slam dunk--for the company to embrace Intel's low-power Atom processors based on the same x86 instruction set used by the Mac, given its existing relationship with Intel.

Still, Forbes says the negotiations were led by Apple CEO Steve Jobs with the aim of putting PA Semi's PWRficient processors at the heart of the iPhone and future iPods, citing a source close to PA Semi. If that's true, Forbes is correct in noting this is a huge blow for Intel's Atom project, but I'm skeptical in these early hours as to Apple's eventual plans for the company and its employees.

Apple is an Intel customer. Intel has a new chip. Therefore, Apple will use Intel's new chip.

Such leaps of logic are easy to make when you need to construct an SEO-friendly headline, or to attach a news hook to an announcement of a chip that has already been announced five or six times but still won't appear in any devices for another couple of months. Intel is talking up its Atom processor halfway around the world at its Intel Developer Forum in Shanghai, prompting Forbes to resurrect the "Apple will use Silverthorne" rumor from a few months back.

One of the Atom-based MIDs Intel is showing off in Shanghai. Will Apple really come out with their own version?

(Credit: Intel)

Atom, the low-power processor formerly known as Silverthorne, is Intel's latest attempt at cracking the mobile market. It will bring laptop-like performance (at least, your 5-year-old laptop) to handheld devices known as MIDs, which should start appearing from Intel's partners this summer, according to the company's press release.

So, will Apple use Atom in a new multitouch whiz-bang gizmo? Apple is a pretty unique partner for Intel, who until recently was used to shoveling new technology down the eager throats of the PC industry. Apple does whatever the hell it wants, picking and choosing chips from Intel's roadmap with no sense of obligation to support the chipmaker's every single initiative.

I'll go out on a limb: Apple is not going to use this generation of Atom in the iPhone or iPod Touch. Atom is a good stepping stone for Intel's low-power design teams, but it's still an order of magnitude away from the power consumption goals Apple requires for those products. Come Moorestown in 2009 or 2010, maybe that's different, but we're not there yet.

So, if Apple is going to use Atom, it would be for a completely new category of device that would be larger than the iPhone. Perhaps The Return of Newton, or an Eee PC clone, or some type of iTablet. Basically, it would have to be about twice as big as the iPhone to deal with the power consumption.

Call me a skeptic, but doesn't that seem like a lot for Apple's engineers to tackle in a year, adding a whole new device category when iPhone 2.0 (both in software and hardware) is right around the corner? And when new iPod Touches and iPod Nanos are expected in September?

They'd have to port OS X from ARM's chips to Intel's x86 instruction set, for one. Maybe that's not that difficult a task, since Mac OS X, of course, already runs on Intel's chips. While Apple might indeed have a parallel OS X on x86 development path, like they did with Mac OS X in the years before they switched from Power PC to Intel, that's a leap I haven't seen made by many Apple followers as of today.

They'd also have to qualify a totally new hardware platform, at the same time they're likely going through the same process with a 3G iPhone. Is that really worth the effort? Truth be told, few people are going to buy the MIDs Intel and its partners are hawking with Atom. They just aren't that different from the UMPCs that nobody bought the last time around, in looks, capabilities, and price.

If you're Apple, it doesn't seem to make much sense to do a "me-too" product--that could take attention away from the iPhone, iPod Touch, and MacBook rennassiance--when you've got so much else on your plate in 2008. But, believe it or not, Apple doesn't consult me when making road map decisions.

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SANTA CLARA, CALIF.--Intel CEO Paul Otellini sought to reassure major investors Wednesday that the world's largest chip maker is still poised for strong growth into new areas like mobile computers, and can maintain its current lead in PC technology.

Otellini reiterated much of Intel's pitch from the last six months that the world of handheld mobile computers and low-cost PCs can supplement the slowing-but-steady growth of the PC market. Intel is investing new products like its Atom processor and attempting to break into these new markets by reminding software developers and device makers that Intel's chips are used to run today's PC-based Internet, and are ideal for allowing tomorrow's mobile devices to access that Internet.

Intel CEO Paul Otellini laid out Intel's plans for growth in front of investors Wednesday.

(Credit: Tom Krazit/CNET News.com)

Investors from major financial institutions might be forgiven for being a bit skeptical coming off Intel's news this week that its gross margins would sag this quarter on falling flash memory pricing. But Otellini promised "this is a business that will not be a drag on Intel," and that the company was finding ways to make sure the volatile flash memory market does not hurt its bottom line.

Instead, Intel's CEO wants investors to focus on the potential for Intel's large bet on mobile devices. The company has been on a evangelical push for the last six months touting the virtues of the x86 instruction set in the world of mobile devices. The idea is that anything that can run on a PC--take Adobe's Flash, for example--would be able to run on a handheld device with one of Intel's Atom processors.

To break into this market, Intel is reducing the time between when an idea gets approved to production starting with the new Atom generation of products, Otellini said. The goal is to get from idea to prototype in six months, and then from prototype to production in another six months. PC processor designs take much longer, several years, from idea to production.

Intel also thinks it will benefit as people start owing and using more than one sophisticated computer, whether that's a home desktop, a work laptop, a smartphone, or something else we haven't even thought of yet.

Sean Maloney, Intel's sales chief, took the idea further as he talked about Intel's Netbooks project to build low-cost notebooks based on the Diamondville derivative of the Silverthorne processor. Intel sees Netbooks as almost "starter PCs," borrowing that time-honored marketing tradition of getting young kids hooked on a basic inexpensive computer and then sticking with them as their tastes mature and their demands grow more intense.

Intel is at a very interesting time in its history. PC and server growth has slowed, although it continues along at a "low-double digit" growth pace, Otellini said. That's not the kind of growth that gets investors all excited, however, they like the kind of growth more in the 20 percent range.

Having seen these trends a while ago, Intel has been searching for its next big thing for several years. But while it does that, and tries to build a business around handheld mobile computers and low-cost PCs, it has to keep an eye on its main markets.

One major area sorely in need of improvement is Intel's graphics tehcnology, currently built on outdated manufacturing equipment as a way of wringing productivity out of older factories. That is going to change, said Otellini, as Intel starts moving more and more of its chipset production to newer factories using the latest manufacturing equipment.

This will have a few benefits, he said. It will allow Intel to build chipsets with more transistors dedicated to graphics, since it will no longer have to use older technology that can't build transistors as small as its latest and greatest stuff. It will also help Intel reduce expenses as it moves toward "fewer, larger factories," Otellini said.

And Intel remains hard at work on Larrabee, its "many-core" programmable chip that appears to be designed for a variety of tasks that could well include graphics acceleration. By 2010, Intel hopes to have shipped Larrabee and moved all of its graphics transistor production to its leading-edge manufacturing technology, so that the same equipment is used for both CPUs and graphics, Otellini said.

Intel is in pretty good competitive shape at this point, with AMD still working to get into the quad-core era. But Intel has had trouble breaking into new markets outside the PC or server in the past, which is why investors will be watching closely over the next two years to see what Intel's talking about at that point.

Conspicuously missing from the spotlight during Intel's presentation this year? Viiv digital-home PCs, UMPCs, and cell phone processors, which have played prominent roles in past Intel investor rallies. There may very well be a market for starter PCs and x86 smartphones, but if history is any guide, Intel will strike out on at least one of those efforts.