tequila bomb

Fascinating article on the background of Intrinsity. The specialist fabless semiconductor company which is responsible for Apple’s A4 processor in the iPad. If you have time to read the full thing then do so. If not then I’ve cherry picked the stuff that is less technical, and speaks to what this means moving forward for Apple, and other manufacturers…

In September 2008, Samsung went against ARM’s suggestion that any semi-custom implementation of the Cortex-A8 wouldn’t be faster than TI’s OMAP3 version. They inked a deal with Intrinsity to develop a FastCore version of the Cortex-A8 called as (sic) the Hummingbird. In the meanwhile (sic), Apple was also looking for a way to speed up the Cortex-A8 for their iPad. It is believed in industry circles that Samsung asked Intrinsity [to] develop a FastCore version of the Cortex-A8 at the behest of Apple for A4, and also ended up using it for the S5PC110 / S5PV210 after splitting the cost (rumored to be around $55 million). The ‘hardening’ was completed in July 2009, just in time for the rest of the A4 SoC to be taped out for the iPad and the S5PC110 for the Samsung Galaxy S.

Off topic, but this story when taken in its entirety reminds me in some ways of what Microsoft did to Sony over the processor design for the 360 and PS3. Apple playing the part of Microsoft here. Except in that story IBM had two secret projects going. The second (for the 360′s CPU) which started later and learned from the mistakes of the first (making the PS3′s CPU) at Sony’s expense. Obviously in that tale neither Microsoft or Sony were involved in a conscious collaboration. Far from it in fact, as we all know. But ultimately some would say Microsoft walked away with the better deal.

While introducing the iPad in January 2010, Steve Jobs specifically commented on [the] A4 as the best and most complicated chip Apple had ever designed. Industry watchers were skeptical when it became obvious that the A4 was just a SoC hooking up various IPs available from different companies. Once it became evident that Apple had indeed purchased Intrinsity, Steve Jobs’s claim began to make more sense. In effect, Apple had indeed developed their most advanced silicon to date!

Steve’s claims always need to be taken with a healthy dose of anti-RDF medicine. But Apple have certainly got an exclusive design hybrid of the existing ARM Cortex-A8 core – and now control that design themselves with this purchase.

In April 2008, PA Semi was acquired for $278 million. Their claim to fame was a 64 bit dual core processor called the PWRficient. The analysts were greatly surprised at this acquisition since PA Semi’s IP had no place in the roadmap of any of Apple’s products (except, probably, the Apple TV) since its power consumption was too high at 25W. The consensus was that the purchase was made for the manpower with VLSI experience that PA Semi would provide to Apple’s team for designing chips for future generation of products in the iPhone / iPod / iPad line. Then, again, most of the PA Semi engineers have since moved on from Apple to work in a startup named Agnilux (which was recently acquired by Google).

When seen in the above context, it is really easy to determine why Apple needed to acquire Intrinsity. Being the force behind the performance of the Cortex-A8 in the A4, it makes sense for them to acquire the engineering talent and the technology behind this. Not only would it improve the performance of the ARM cores in the future members of the A4 family (Intrinsity was supposedly working on hardening the FastCore version of Cortex-A9), it would also prevent the competition (read, Samsung) from utilizing this technology to make fast app processors for phones such as the Samsung Galaxy S.

This is what I was talking about above when I referenced Sony and Microsoft above.

Founded in 1997 by 22 veterans in the microprocessor design industry, the firm [Intrinsity] initially worked towards developing interesting circuit design techniques and related design infrastructure for performance improvement (speed of circuit operation) using domino logic.

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From a technology perspective, domino logic has long been regarded with suspicion by many people because of the associated problems. Though speed and performance increase, the power consumption as well as integration with the rest of the design flow remains an issue.

It’s worth noting that one of the problems with Intrinsity’s particular method of increasing processor speed does have some power consumption issues. Something that PA Semi is said to have specialised in. This is pure speculation on my part, but perhaps there was some crossover in the aquisitions by Apple there. PA Semi were originally believed by many to be the brains behind the A4.

As noted [above], Apple has never been able to retain the important employees from its semiconductor acquisitions. It remains to be seen how much of a leeway from the usual Apple work culture is given to Intrinsity after the acquisition, as this would probably decide how much of the talent actually continues to remain in Apple to contribute down the road.

One would hope, for Apple’s sake, that they have learned from the past, and perhaps tied important people to some contracts that both protect Apple, and keep those people happy.

From Intrinsity’s perspective, the acquisition probably comes as a relief. [T]he company [had] been reliant on a few big customers for revenue and had to get back to the venture capitalists for more and more funding every few years.

In a nutshell, the still interesting but quite detailed financial stuff that I’ve left out boils down to Intrinsity being a venture capital backed startup in the later stages of repeat funding, which had yet to find a sustainable revenue stream. Intrinsity did have some successes, but just before Apple picked it up (possibly for much less than investors had put into it) Intrinsity’s outlook was indeed bleak. Despite it having a great, if niche, set of skills and designs to sell.

Some think Apple paid more than others for Intrinsity…

From Apple’s perspective, $121 million or sub-$50 million really doesn’t matter, since the amounts happen to be a drop in the bucket for a company with more than $40 billion in the bank.

True. Apple is a company that could buy ARM, for example, without breaking a sweat.

Apple has long claimed that they needed to design their own CPU in the iPad series to decide where the exact performance push would go. With Intrinsity, they were able to get a fast core and split the hardening cost with Samsung. It is not exactly clear how Apple can customize the CPU any further than what Intrinsity would do as an outside job without holding an architecture license from ARM (MPR suggests that Apple also possesses an architecture license, though we are unable to confirm this from other sources).

Perhaps Apple still plans to strengthen its hold on ARM. But also it was mentioned above that Intrinsity are supposedly working on hardening the FastCore version of the Cortex-A9 too. So that is at least one more possible iteration of their “custom” processor potentially in the pipeline. A CPU that would probably tie up quite nicely with a GPU from Imagination that I mentioned here.

If Apple was hoping to cut down on the cost of hardening future CPU cores by purchasing Intrinsity, it doesn’t seem like such a great decision keeping the above points in mind. On the other hand, if the aim was to prevent the competition from getting access to this technology, it may succeed to quite an extent. All in all, it can’t be said that Apple’s acquisition of Intrinsity is a slam dunk.

No, but it is a safe move. Even if a hardened A9 core doesn’t materialise, and even writing off a few hundred million as they also did to some degree with PA Semi, it’s still their smartest move to date in semiconductor acquisitions!

What repercussions does this acquisition have for the rest of industry? It is still not clear whether Intrinsity would continue to support any of their existing customers (AMD/ATI and AMCC — whether they are still using FastCore technology is not known). However, we can safely say that the FastCore version of the Cortex-A8 on Samsung’s 45nm node is the final Intrinsity product available for other fabless semiconductor companies to license. This hardened macro (called the Hummingbird) has found a place in some of Samsung’s app processors, but we are not aware of any other licensees for this.

By purchasing Intrinsity Apple have actually done what a lot of people suspected might be a motivation for them buying ARM. They’ve cut some competitors out of a hardware loop.

Of all the companies involved, it appears that Samsung’s app processor division would suffer the most in this transaction. It is quite possible that they were counting on a FastCore version of the Cortex-A9 at the 32nm node for their next generation product in the S5PC line. The online rumour mill suggests that Intrinsity had already been working on a FastCore version of Cortex-A9, but it is not clear whether it was Samsung who had requested it (most likely). The status of this FastCore after Apple’s acquisition remains unclear.

I suspect Apple have plans for it.

While Samsung’s app processor division could end up unhappy, things continue to bode well for Samsung’s foundry business. Apple was never likely to move away from them for future members of the A4 product line, but Intrinsity’s acquisition and their previous experience with Samsung’s process flow only continue to strengthen this belief.

Apple are still going to be using Samsung to make these things. Which is cash in SamSung’s pocket. And perhaps Apple can pay with silicon instead of cash for manufacture in future. Which might be a win-win for both companies.

Intrinsity’s technology, back in 2001, was probably a bit ahead of its time. Undoubtedly, their most outstanding success to date seems to be the Hummingbird core in the 45nm node, showing how their technology has matured and delivered outstanding results for a company of Apple’s stature to use in their own products. Unfortunately, for the rest of the industry, the technology has been rendered no longer licensable.

In closing, it can be said that there are no outright winners in the asset acquisition. While Intrinsity’s investors may have just about broken even or may have even had to get out with a big loss, Apple has its hands full in trying to get some returns for the investment in their †third semiconductor company acquisition. In particular, considering the fact that they don’t seem to have had much success with the first two, it will be interesting to watch how Apple’s management style works in a small fabless semiconductor company.

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Current licensees of Intrinsity’s technology and the Samsung application processor group (particularly if the rumors of Intrinsity’s current activities with respect to the Cortex-A9 turn out to be true) seem to be left in limbo.

The industry, in general, has lost the ability to take advantage of a technology whose time seemed to have just arrived.

Something perhaps Apple has lucked into snapping up.

Intrinsity’s Historical Financial Timeline.

†In November 1999, Apple acquired Raycer Graphics for $15 million dollars, supposedly for the 3D graphics related patents that the company held. People continued to speculate for 2 or 3 years after this wondering when the products from this acquisition would replace Nvidia’s role in Apple computers. Unfortunately, this never came to pass, and people from the Raycer acquisition just moved on to join companies like SGI and Nvidia.

If you click on LaLa’s website link above you will see that…

Lala is shutting down.

The Lala service will be shut down on May 31st, 2010.

Unfortunately, we are no longer accepting new users.

Members, you can still use Lala through May 31st, 2010.

Log in for details

Apple acquired LaLa on December 4, 2009.

One of my bets for iPhone OS 4.0 was a music streaming service. Even if that is still wide of the mark it’s almost certain we’ll see something happen with iTunes and whatever Apple have done with LaLa.

WWDC is just around the corner.

I’ll let you connect the dots.

UPDATE : From a LaLa user HinterRecords.

I don’t mind these guys getting some free advertising because their fantastically innacurate and retarded analysis of Steve Jobs’ letter on Flash is so entertaining. It’s like the anchor man and woman have come straight off the Simpsons!

digits truly are the Fox News of Tech! Awesomely entertaining and trashy show!

There is also some equally confusing and entertaining stuff on Palm.

Here is the actual interview with Adobe’s CEO that they allude to above…

I said I had my doubts about this device some time ago when writing for Touch Reviews :

If, and this is a big if. But if Microsoft can produce this device so that it looks as good as the pictures we have seen to date. And if the User Interface has the functionality detailed in those concept videos, then the Courier is going to be truly remarkable. And I will camp outside a store or travel half way round the world to buy one on day one. And I’ll want to develop for it too.

I am not convinced that this device will be all that the videos and pictures promise. It just seems too good to be true. But if it is then I think we could see a massive shift in power in the mobile market place.

Official word from Microsoft :

At any given time, across any of our business groups, there are new ideas being investigated, tested, and incubated. It’s in Microsoft’s DNA to continually develop and incubate new technologies to foster productivity and creativity. The “Courier” project is an example of this type of effort and its technologies will be evaluated for use in future Microsoft offerings, but we have no plans to build such a device at this time.

What blows my mind, but doesn’t surprise me particularly, is that Microsoft would kill a device which is eminently possible, extremely well received as a concept, and potentially quite successful.

If Microsoft were a relative I would stage an intervention and force them to get help because I am worried that they are into self-harm.

Oh, this is priceless!

Where to start? So much material…

Carol Bartz said that Google would have to “do a lot more than search” and suggested that it would have to “grow a company the size of Yahoo every year”.

To do what exactly? To really rub Yahoo’s nose in the dirt?

At one point in the not too distant past, Microsoft was going to buy Yahoo for an inflated value of $40 Billion Dollars. Yahoo has steadily declined from around $40 Billion in the late 90′s to a market cap of $23.82 Billion Dollars today. At one point in late 2009 it was worth 1/15th of what Google is worth right now.

Yahoo have not even managed to grow in line with inflation!

Conversely Google has increased from $100 per share in 2004 to over $600 per share today, and a market cap of $167.72 Billion Dollars. That is 90% growth every year averaged out over the last 6 years.

Ironically Google have *exactly* grown by the size of a company the current size of Yahoo every year for the last 6 when averaged out!

[Yahoo] competes with Google in the search market, but has only 17% of the US market, compared to Google’s 65%, according to Comscore. Yahoo recently did a deal to use Microsoft’s Bing to power searches on its sites.

Yahoo was an internet search company which lost out so badly on the search business that it is almost irrelevant today, and has had to go to Microsoft (a company which almost bought it for chump change not so long ago) in order to provide its search results.

“Google is going to have a problem because Google is only known for search,” said Ms Bartz.

I think Ms Bartz has been using her company’s own search engine for her research. And can only presume that she has never used YouTube, GMail, Google Docs, Google Earth, Google Street View or an Android smart-phone, or actually ever left her padded office inside Yahoo.

“It is only half our business; it’s 99.9% of their business. They’ve got to find other things to do.

A business that is worth over 7 times the value of hers.

I thought Google’s business was advertising anyway? Search is a lost leader isn’t it? Perhaps Yahoo doesn’t get that. What Google provides as a lost leader, when compared to the same service from Yahoo, is like comparing Apple’s OS X to Windows Vista.

“Google has to grow a company the size of Yahoo every year to be interesting.”

I think Yahoo should focus Carol’s attention on keeping Yahoo “interesting”, and tell her to stop worrying about Google’s future. They’re doing just fine.

I don’t even have Yahoo as a Category on my blog for tagging posts. That’s how relevant they are.

I also have a sneaking suspicion that the ad quality, and the companies choosing to advertise with Apple may be of a higher quality overall than those advertising with AdMob. They may also pay better than AdMob’s clients. But that’s pure speculation on my part.

From tequilabomb.com.

Setting a high bar for its debut in the advertising business, Apple Inc. aims to charge close to $1 million for ads on its mobile devices this year and perhaps even more to be among the first, ad executives say.

Apple is hitting the road to showcase its new mobile-device advertising capability, dubbed iAd, and has indicated it could charge as much as $10 million to be part of a handful of marketers at the launch, according to a person familiar with the matter.

Ad executives say they are used to paying between $100,000 and $200,000 for similar mobile deals.

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Apple is planning to charge advertisers a penny each time a consumer sees a banner ad, ad executives say. When a user taps on the banner and the ad pops up, Apple will charge $2. Under large ad buys, such as the $1 million package, costs would rack up to reach $1 million with the various views and taps.

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Apple is seeking high quality ads from big-name marketers for the launch, ad executives say. The ads will go through an approval process, and Apple will build the ads itself during the first couple of months to make sure they work well and attain a certain aesthetic and functionality, ad executives say. Eventually, Apple plans to create a developer kit so that agencies will be able to design and create the ads themselves.

From WSJ.

If I was going to put ads in my apps I know who I’d go with out of choice. Especially if I am getting the same “industry standard” cut.

UPDATE : Of course the thing I am curious about now is whether everyone will be welcome to be an “iAd App Developer”. I have a sneaking suspicion that Apple will want to make sure its premium advertisers are getting a good deal with their iAd placement too.

The whole letter is worth reading.

Points that stuck out for me :

Adobe claims that we are a closed system, and that Flash is open, but in fact the opposite is true. Let me explain.

Adobe’s Flash products are 100% proprietary. They are only available from Adobe, and Adobe has sole authority as to their future enhancement, pricing, etc. While Adobe’s Flash products are widely available, this does not mean they are open, since they are controlled entirely by Adobe and available only from Adobe. By almost any definition, Flash is a closed system.

Apple has many proprietary products too. Though the operating system for the iPhone, iPod and iPad is proprietary, we strongly believe that all standards pertaining to the web should be open. Rather than use Flash, Apple has adopted HTML5, CSS and JavaScript – all open standards. Apple’s mobile devices all ship with high performance, low power implementations of these open standards.
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Adobe has repeatedly said that Apple mobile devices cannot access “the full web” because 75% of video on the web is in Flash. What they don’t say is that almost all this video is also available in a more modern format, H.264, and viewable on iPhones, iPods and iPads.
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Symantec recently highlighted Flash for having one of the worst security records in 2009. We also know first hand that Flash is the number one reason Macs crash. We have been working with Adobe to fix these problems, but they have persisted for several years now. We don’t want to reduce the reliability and security of our iPhones, iPods and iPads by adding Flash.
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In addition, Flash has not performed well on mobile devices. We have routinely asked Adobe to show us Flash performing well on a mobile device, any mobile device, for a few years now. We have never seen it. Adobe publicly said that Flash would ship on a smartphone in early 2009, then the second half of 2009, then the first half of 2010, and now they say the second half of 2010. We think it will eventually ship, but we’re glad we didn’t hold our breath. Who knows how it will perform?
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Flash was designed for PCs using mice, not for touch screens using fingers. For example, many Flash websites rely on “rollovers”, which pop up menus or other elements when the mouse arrow hovers over a specific spot. Apple’s revolutionary multi-touch interface doesn’t use a mouse, and there is no concept of a rollover.
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Flash was created during the PC era – for PCs and mice. Flash is a successful business for Adobe, and we can understand why they want to push it beyond PCs. But the mobile era is about low power devices, touch interfaces and open web standards – all areas where Flash falls short.

For more eloquent than “Fuck you, Apple”.

Bungie, the former Microsoft development studio responsible for the Halo trilogy of games, has announced a decade-long deal with Activision, which will see the publisher take charge of bringing its games to market across multiple platforms.

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The move comes at an interesting time for the world’s largest videogames publisher, which saw its president and CEO Mike Griffith resign last week amid the ongoing messy – and very public – implosion of its Infinity Ward studio.

From gamesindustry.biz.

I am not a huge fan of the Halo franchise. But these guys do have some talent. I hope they got themselves a good deal. And by that I mean something that allows them to do what they want to do, not just money.

Otherwise the phrase, “Out of the frying pan, into the fire”, springs to mind.

UPDATE :

The developer is working on new intellectual property, and will retain the rights to that IP under the terms of the deal – which was nine months in the making.

And all future IP, right? I hope so for their sake.

Sure the hacker should be prosecuted. Mainly because he and his friends are gutter snipes. And their hacking is for monetary gain, pure and simple.

Hacking is bad mmm-kay, but I do have some sympathy with people who do it to see if they can, and then stop there. That is the geek equivalent of climbing a mountain after all.

The thing is though, if you conduct a public poll, and then post the chat logs where the subjects of the poll describe the people who are going to participate in it, and obviously also take part in the site’s comment threads, as “huge idiots”, what would you really expect the poll outcome to be?

Friend 6: i could seriously read these comments on techcrunch all day
Friend 6: the readers are such huge idiots
Suspect: Tulle i read the articles title and then go straight to comments on TC
Friend 6:) hahaha
Suspect: you know
Suspect: sometimes i even go make food
Suspect:) set everything up
Suspect: and read the comments
Suspect: they are that “good”
Friend 6: hahahahha

Shame. It would have been an interesting social experiment otherwise.

Friend: i did it
Friend: and i got paid
Friend: just do it for a few hours at a time
…
Friend: i did it on a site with 230k/day and made like $700 in 3 hours
…
Friend: and i got paid every cent
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Friend: and adscendmedia doesnt care
Friend: and i am gonna do it again

A more important question is why are advertising firms letting them get away with it.

The poll is currently running relatively surprisingly at 77% to 23%.

77% for prosecuting the hackers.

I suspect that some of the 23% against didn’t actually read the thread, scrolled down for pictures, didn’t find any, and then just clicked the first option they saw. The average attention span for TechCrunch readers is about 15 seconds by my estimation. Probably just slightly higher than that of the authors of their articles, and that of goldfish.

I’m not linking to the poll page specifically because the low life that hacked them do have one point in their mostly juvenile discussion :

TechCruch will do pretty much anything for page views. Something the hackers were sensible enough to factor into the timing of their hacks.

Suspect: There’s no such time as a ‘good time’ to be hacked of course, but one can only imagine that today is a better day for TechCrunch to be hacked than tomorrow. That’s when the site will be expecting a large amount of traffic as millions of people around the world look for information about the new iSlate/iPad/iTablet/iDontKnowWhatItWillBeCalled due to be announced by Apple.

Superbly funny.

But you guys are busting down doors in Palo Alto while Commandant Gates is ridding the world of mosquitoes! What the fuck is going on?!