Gizmodo
P.A. Semi, the chip design company Apple picked up for a song, is best known for its super-efficient PWRficient processor, a PowerPC variant. One of the big customers for the CPU is the Department of Defense, which makes use of it in programs in every major branch of the military, and they're not thrilled by the possibility of Apple ending production of the chips.
Ten defense systems, to the tune of $100 million in products over the next four years, use P.A. Semi's PWRficient processor. On Monday, P.A. Semi told its customers they were being acquired and couldn't guarantee chip supplies anymore. (Brings us back to the problem of obsolete tech in the military.)
It's possible the licensing issues could get worked out to maintain supply "on an end-of-life basis" but in that same statement, P.A. noted that their buyer (Apple) wasn't interested in their products or roadmap, just their IP and engineering skills. Which means Apple has no interest in anything their currently making or about to make, despite Blam's reasonable assumption that was the case. So it's all about their design chops, or they really are just a bargaining chip. [EETimes via GigaOM]
Comments
Apple would be stupid to take a verticle market like that and toss it aside. Just another guarateed source of revenue for Apple.
apple could cash in on all the extra crap that that company does. but from the looks of things apple is just gonna use that companies skills and advancements to make apple products better, quite possibly a switch from intel to this chip... im gonna assume a CPU switch cause they have done that before and i would expect that...
Apple isnt going to be pleased when people start installing OSX on non-Apple branded Tomahawk Cruise Missiles.
This is getting juicy. Wonder what they're thinkin up over on the Infinite loop.....
Why does Apple support the terrorists?
Apple is anti-American BOYCOT BOYCOT! no seriously amazing photo made me laugh out loud
Can someone explain to me the economics of a super-efficient chip company with at least $100M in guaranteed government contracts selling itself for $278M?
What am I missing here? What keeps such a company from being a major player with major value?
@92BuickLeSabre: Steve obviously had em trapped in his Reality Distortion Field. didn't the meeting go down at his house?
@segamanxero: right, a CPU switch right after finishing a multi-year architecture transition that took 100,000's of engineering man hours to a platform that is not even desinged for general purpose computing. Instead of staying with intel, who's product roadmap is looking brighter than ever.
@92BuickLeSabre: Mismanagement?
The Gov is going to start using macs! Mwah hah hah!
Wait what did you write?
Oh oh oh! Well it's not like the Military can't just make Apple fulfill the contracts they just purchased.
Jobs is a hippy. He would'nt sell crap to the military if could help it. Another reason to love Apple.
Imagine the power Jobs will have once the government has to go thru Itunes in order to order air strikes.
@albokay:
idk why but that was fucking hilarious
So Ipod Docks on the M16?
@albokay: I suppose next time I get an iTunes update it will come with a Global Thermonuclear War download pre-checked?
@92BuickLeSabre:
Assuming the $100M is sales from gov. contracts over the next four years, that gives P. A. Semi pretax profits of $25M using a 25% profit margin (AAPL's is ~22%). Take taxes out of that and spread it over four years, and it really isn't all that much. I don't know what their total sales looks like, but I think the $278M price is about right.
Thanks all.
So to compound my show of ignorance, ludwigk, if Apple was previously thinking about going with these guys when they went with intel, can you give me a quick explanation (for dummies) about why their chip structure wouldn't work for other mainstream uses?
I don't mean to understate the importance of good management, marketing, getting that one, good, contract (and I guess recent AMD's slipping might prove exactly the point), but this still all seems so strange to me that what is apparently a quality product, with at least some stable certain income would sell for what seems like a pretty low price.
But.. Will it run on PsyStar machines?
Maybe they've got some low cost desktops planned. All universal apps would run on a PPC CPU, you just wouldn't be able to install Windows. I don't see why Intel and PPC chips couldn't coexist in Apple's lineup.
these are most probably embedded processors not CPUs for computers. Apple will stick with intel CPUs for the foreseeable future.
Department Of Dipshits
Uncle Steve is saving them from making horrible soulcrushing mistakes on behalf of the military industrial complex. They have begged to be cut free from the murderous claws of defense contracts and have been delivered into an oasis of creativity on the path to simple ubiquitous toolsets to aid in our evolution as a species.
Either that or here come the iNukes!
@johnnyabnormal:
Leave America if you don't like how we run things... We would be better off anyways without you and your anti-American ways
ohhhh god bless El Jobso!
@mricyfire: Woah Cheney, relax buddy. Have a freedom fry and take a breather.
Nawww... you want to keep that software away from nuclear facilities, aircraft navigation or communication systems, air traffic control systems, or life support systems.
[www.flickr.com]
@Mark 2000: yeah no thats great, I love it when our military cant get what they need in order to properly defend your right to put them down.
@scoobydoo: I know you were being sarcastic but come on. Nothing is produced forever. It's like complaining that VW dealers won't support your 1966 aircooled Beetle anymore. Time to find a new-old-stock supplier or, more realistically for the DoD, buy a newer car.
@Mark 2000: Great sarcasm!
@mricyfire: A little strong, perhaps. We always try to be civil here. Usually. Sometimes.
Most defense projects are based on COTS processors these days. That's why many defense projects get cancelled. By the time the product is ready for low-rate initial production, the processor is no longer available. Making a life-time buy of processors up-front is usually not an opted. So, they keep going back to the drawing board over-and-over until Congress finally gets fed up and yanks funding for the project, usually after hundreds of millions or billions of dollars have been wasted.
@mricyfire: Questioning the practices of government is the basis for our country. The fought a war about it in the 1700s or something. I'm probably just mistaking all the details with an HBO miniseries.
I for one am waiting for Apple branded bunker busters and matching dancing silhouette commercial.
@ludwigk: They actually passed over P.A. Semi for Intel—P.A. Semi thought they had the contract with Apple before Jobs shocked them w/ the Intel announcement.
@Buran: Also, the transition to the PWRficient chips, from what I've read was a surprisingly fast one for the military, who started using it in a shitload of projects at once (because of how impressed they were). So if say, IBM doesn't start making the PWRficient chips for them, I could see why they'd be pissed.
@mricyfire: Ok, tough guy. Can I ask you a personal question? Do those little yellow ribbons help you sleep better at night?
@GadgetPlay: Sometimes!
@Mark 2000:
Incorrect... not to hype an engadget story on here, but check this out from last year (the story was also widely reported elsewhere):
[www.engadget.com]
@GadgetPlay: Nothing is more absurd or hypocritical than someone who says it's "anti-American" to dissent or criticize one's own government. Simply hilarious, but sad as well.
@mricyfire:
I'm sorry but with that comment you just started sucking on your own foot.
Go wave your flag at a history book and figure out what it is to be an American you ignorant cock grab.
Something big is happening. No one knows what that will be. Except stevie and whoever he cavorts with. So sit tight and watch the magic.
@mricyfire: I'd be amused if you got run over by an M-1 Abrams as you typed that.
Apple is NOT a military hardware manufacturer, so why should they support old tech. It is not the role of private industry to prop up aging US military defense systems! I'm sure this purchase is to provide high speed chips for apple mobile platforms - read intelligent iPods and iPhones and potentially a crossover product between an iPhone and a Macbook.
@92BuickLeSabre:
"Ten defense systems, to the tune of $100 million in products over the next four years, use P.A. Semi's PWRficient processor."
The statement sounds more like there are ten defense systems -- that are made and sold by other companies -- use the P.A. product. These other companies are projected to sell $100 mil of their products in the next 4 years.
I think that this is a tempest in a teakettle folks.
1) PA Semi doesn't have any factories. They design & license the chips. Most (not all) of their chips are built by Texas Instruments.
2) Apple won't refuse royalty income on a product that is already designed, they'll license the PWRficient chip & let TI or Lockheed or whoever the Pentagon wants build that chip forever, as long as they send a check to Cupertino for every chip built.
3) the PA engineers are going to start working on other projects, so there won't be a PWRficient II, but the way that the DoD rolls out new systems, they wouldn't need that until 2025 anyway.
I really think that this is FUD trying to make Apple look bad - they had a brilliant quarter, but they are leaving our warfighters high & dry.
Say what you like about the RDF and Jobs, but he is first & foremost a businessman. There is no way he cuts of a garunteed stream of revenue.
@92BuickLeSabre: I can't help but agree with you, YouTube sold for more than this company and all they do is host videos. Doesn't make sense for a super good chip company to sell for double what it made in a year.
WTF Ever!! Let the DoD have their temper-tantrum_ As long as Apple respects the legality of current standing contracts until they run out or expire - then the DoD has nothing to say on the matter_ They also have no authority to enforce jack-shit in the matter - so who cares_
What would be funny is if Bush steps in and tries to dictate what Apple "must" do on the behalf of national security_ That would be funny and I'd love to see Steve eat Bush for breakfast_
@segamanxero: Okay_ Apple is not going to switch back to the RISC arch that THEY JUST LEFT_
That's a huge cost to migrate an entire platform across all product lines_ This company is a fraction of the size that Motorola and IBM are - so even if Apple were to "switch" back to RISC - PA Semi did not have the production levels to accommodate the mass consumer_
No they aren't switching back_
@92BuickLeSabre: you missed it:
"Ten defense systems, to the tune of $100 million in products over the next four years, use P.A. Semi's PWRficient processor." -- meaning that that PA SEmi gets a cut of the $100 million_ the government projects are worth that much NOT PA Semi's share_ Get it!
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