In seeking to build a key part for its new iPhones, Apple set out to design a chip that would allow it to cut ties with Qualcomm, a longtime supplier and bitter foe. But the new iPhone models just unveiled are missing a proprietary silicon chip that Apple had spent several years and billions of dollars trying to develop in time for the rollout, reports the Wall Street Journal (Sept. 25, 2023).
The 2018 marching orders from CEO Cook to design and build a modem chip—a part that connects iPhones to wireless carriers—led to the hiring of thousands of engineers. The goal was to sever Apple’s dependence on Qualcomm, which dominates the modem market. (Apple paid more than $7.2 billion to Qualcomm for chips last year). But recent tests found Apple’s chip was too slow and prone to overheating. And its circuit board was so big it would take up half an iPhone, making it unusable.
Apple hasn’t publicly acknowledged its modem project, much less its shortcomings. Engineering teams working on Apple’s modem chip had been slowed by technical challenges, poor communication and managers split over designing the chips rather than buying them. Teams were siloed in separate groups across the globe. Bad news from engineers about delays or setbacks– leading to unrealistic goals and blown deadlines–were concealed.
Apple believed, first, it could replicate the success of the microprocessor chips it designed for iPhones. Adoption of those chips fattened profit margins and improved performance for billions of devices. Second, Apple and Qualcomm had bickered and swapped accusations of lying and theft.
Apple had found that designing a microprocessor, a tiny computer to run software, was easy by comparison. Modem chips, which transmit and receive wireless data, must comply with strict connectivity standards to serve global wireless carriers. A brute force of thousands of engineers, a strategy successful for designing the computer of its smartphones and laptops, wasn’t enough to quickly produce a superior modem chip. Three years ago, Apple began replacing processor chips from Intel, used for years in Macs, with a proprietary chip that allowed its laptops to run faster and generate less heat. That Apple chip saved the company $75 to $150 on every computer.
Classroom discussion questions:
- Why was it harder to design a modem chip than a microprocessor chip?
- What did Apple do wrong?