A chip analyst has written a sobering assessment of Intel's chip prowess vis-a-vis Apple in the mobile device race, an odd underdog position for the largest chipmaker.
In the brave new world of tablets and smartphones, chip competition isn't so much about Moore's Law but rather how the "blocks" of circuits are put together and the nexus with the software that runs on those circuits, Gus Richard, a senior research analyst at securities firm Piper Jaffray, wrote in a research note this week.
More specifically, tablets and smartphones use silicon called system-on-a-chip, or SoC, that doesn't always use the latest and greatest chip manufacturing technology but gets the job done.
Not so much about Moore's Law: "The economics of technology has shifted. In the SoC era, system performance and development costs are not dominated by cost per gate (Moore's Law) but rather by design and software," Richard wrote in a research note this week.
Richard continues. "As an example, there is nothing leading edge about Apple's A5 processor. However, the performance of an iPad is perceived by users as better than a PC. This is because the product has a longer battery life, instant on, and a fast internet connection. The A5 processor is not faster than an Intel processor but instead has a large number of IP blocks that execute different functions with lower power and typically more quickly than a general purpose CPU (Intel)."
Software: Software plays an important role too. Apple's software is written to work with one set of hardware resources, wrote Richard, streamlining development compared to Windows "that needs to run on an infinite combination of hardware resources."
Beyond the PC: And Richard had some even more sobering words for Intel further down in the note. "Intel's manufacturing is in the lead...but it has not yet demonstrated that it can design its way out of a PC," he wrote. "We believe that a general purpose processor cannot compete with a purpose-built SoC with dedicated IP blocks like the A5," he said, adding that he doesn't believe Intel's manufacturing process is optimized for SoC integration.
Richard's research note aside, Intel is moving quickly to close this gap. Its Sandy Bridge and Ivy Bridge (coming next year) processors are more akin to an SoC than traditional Intel chips and this trend will become even more pronounced with the Haswell chip, due in 2013, which is expected to be Intel's first SoC for mainstream laptops--not to mention tablets and tablet-laptop hybrids running on Windows 8.
And Intel is putting more emphasis now on graphics and media-accelerating silicon than ever. In fact, Ivy Bridge's biggest improvements will be in special circuits based on 3D transistors that accelerate graphics and media.
Maybe most importantly, Intel actually manufactures chips, Apple doesn't. "As we move into low-power SoCs, manufacturing and process technology matters more than ever before," Intel said in a statement provided to CNET. "We see the ability to tightly integrate process and design as critical to maximizing the benefits of our SoC designs...This is one of the reasons why we've taken steps to accelerate the Atom processor from 32nm (nanometer) to 14nm as we bring this technology to new markets in 2012 and beyond," Intel said.
Apple, meanwhile, must rely on contract chip manufacturers, namely Samsung--an issue for Apple as it skirmishes with Samsung on the legal front. Though Apple is trying to shift to other manufacturing sources such as Taiwan Semiconductor Manufacturing Company (TSMC), that has not gone smoothly to date.
And needless to say, Intel's processors are in all of Apple's Mac products, which are extremely successful. And the MacBook Air, in particular, has been a runaway hit. That packs Intel's newest power-efficient Sandy Bridge chips. The take-away here is that Apple's A series of chips are not--at least not yet--up to the heavy lifting needed when running demanding applications.
Updated at 10:35 p.m. PST: with Intel comment.