Qualcomm Insider: Apple 64-Bit Chip `Hit Us in the Gut'

    by Dan Lyons

    Date

    December 16, 2013 at 2:00 PM

    136723235In public, Apple’s rivals in the smartphone market have tried to downplay the technological advances Apple introduced in the iPhone 5s. But it turns out that one breakthrough -- Apple's speedy, 64-bit A7 microprocessor -- has set off a panic inside its competitors. At chipmaker Qualcomm, which provides microprocessors for many of the Android phones that compete against the iPhone, executives have been trying to put on a brave face to the world, but internally people are freaking out, according to an insider at the company.

    “The 64-bit Apple chip hit us in the gut,” says the Qualcomm employee. “Not just us, but everyone, really. We were slack-jawed, and stunned, and unprepared. It’s not that big a performance difference right now, since most current software won’t benefit. But in Spinal Tap terms it’s like, 32 more, and now everyone wants it.”

    A 64-bit processor handles data in bigger chunks than 32-bit processors, so it can get jobs done faster. PCs have had 64-bit chips for a while, but until Apple introduced the iPhone 5s in September, nobody had put one in a smartphone.

    At the time Qualcomm CMO Anand Chandrasekher called the chip “a marketing gimmick," though Qualcomm quickly put out a statement in which it walked back Chandrasekher’s comment and called it “inaccurate.” Soon after that, Chandrasekher was reassigned. Whoops.

    In fact, Qualcomm and others now are racing to finish their own 64-bit chips. But Apple has gained a substantial jump on them. Qualcomm faces an additional challenge, which is that while Apple designs only one new chip a year, Qualcomm must create multiple designs with little tweaks and alterations to meet the needs of each different phone-maker.

    Worse yet, San Diego, Calif.-based Qualcomm has been cutting costs and laying off workers, and is about to undergo a big transition at the top, announcing last week that CEO Paul Jacobs would step into an executive chairman role as COO Steve Mollenkopf becomes the new CEO.

    Some thought Qualcomm promoted Mollenkopf to keep him from taking the CEO job at Microsoft, where he was reported to be a candidate. But there may be more to the story than that.

    How Did They Miss This?

    How did Apple catch its competitors so flat-footed? Apparently most people in the mobile industry figured 64-bit was not a big deal right now, since most smartphones can’t really take advantage of it.

    “The roadmap for 64-bit was nowhere close to Apple’s, since no one thought it was that essential,” the Qualcomm insider says. “The evolution was going to be steady. Sure, it’s neat, it’s the future, but it’s not really essential for conditions now.”

    But once Apple introduced a 64-bit processor, all the other phone-makers wanted one too. “Apple kicked everybody in the balls with this. It’s being downplayed, but it set off panic in the industry.”

    In the past, the iPhone was zippy not because it boasted a super-powerful processor, but because of the way Apple integrated the whole system — hardware and software — and the fact that Apple could tightly control how developers wrote code for the iPhone.

    An analogy would be a sports car that manages to be fast with a small engine because it is light, well-engineered, and has a great suspension.

    But now Apple can also claim an advantage in raw horsepower. The new 64-bit A7 chip is the smartphone equivalent of a big V12 engine.

    Apple’s rivals find themselves in the unlucky position of having to shift to 64-bit chips sooner than they’d originally planned. Changing a processor roadmap is not as simple as just flicking a switch. 

    Right after the iPhone announcement last September, Samsung’s top mobile executive said Samsung was also working on 64-bit processors. There have been rumors that Samsung will introduce a mobile device with a 64-bit chip early next year.

    As for Qualcomm, the company just this month showed off a 64-bit version of its Snapdragon processor and vowed to get that chip into actual smartphones by the second half of 2014 - basically, a year behind Apple. That's if all goes well. Fingers crossed. 

    Written by Dan Lyons

    Marketing Fellow at HubSpot. Former tech editor at Newsweek, tech columnist at Forbes, and creator of "Fake Steve Jobs."

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