Below is an article providing another viewpoint anticipating the iPhone impact.
By Tom Krazit, CNET News.com
Published on ZDNet News: June 22, 2007, 7:27 AM PT
Some may be tired of Apple's iPhone already, a week before it launches, but Warren East does not fall into that category.
The chief executive of mobile-processor designer ARM thinks that the iPhone will spur the adoption of smart phones by consumers who have found the current offerings too clunky or hard to use. With his company's designs inside something like 95 percent of all the smart phones in the world, that would be good for business.
East is too savvy to directly comment on whether Apple is using a chip based on one of ARM's designs, which ARM licenses to companies that actually make the chips. But ARM is by far the dominant architecture used in this world, almost the same way the x86 architecture dominates the PC industry.
ARM has been moving into other markets of late, making a push into areas like digital cameras, printers and digital set-top boxes. But the company is famous within the tech industry because of its unique position within the mobile-handset world, which is already much bigger than the PC industry and is still growing at staggering rates. East recently sat down with CNET News.com to discuss the state of ARM, as well as Apple's first attempt at playing inside his realm.
Q: So the core business still remains the mobile-phone business.
East: From a business point of view, we don't really distinguish between the two. At our level, a core that is good for a mobile phone is also good for all the other products I mentioned.
Do you see that as something that will change in the future, as these devices become more specialized?
East: Not really. One could get more and more specialized, but our business model is that we don't do that. We license intellectual property to semiconductor companies, and if we start doing very customized things for a particular product, then there is no room for our licensees to differentiate and compete. It doesn't make good business sense for us to do that.
I'm slightly generalizing because we do have a dozen or more different flavors of our microprocessor cores. Some cores, people will license from us for use in deeply embedded microcontroller-type applications, things like Cortex-M3. Things like Cortex-R4 finds a lot of use in things like hard-disk drive controllers and will find it's way into printers and those type of things.
Then there are the application processors, the things like the 926, the 1176, the Cortex-A8, and they're developed to support heavyweight operating systems like Microsoft (Windows), Linux, Palm.
Mac OS?
East: (Laughs) You'll have to talk to Apple about Mac OS.
With the iPhone coming up, we've been talking a lot about the future of mobile devices. What's your take on all that?
East: When they (Apple) launched the iPhone, they said (they expected to sell) 8 million units, something like that. Some people asked us, why are you getting particularly excited about that because, you know, there's a billion phones (sold a year), and 8 million isn't going to make any difference.
I'd say, "Well, it isn't just Apple's contribution directly, it's the contribution that they make through gearing." If you look at what they did to MP3 players, MP3 players is a category of devices where there were lots of ARMs shipped for years, and then Apple came along with the iPod, and in a space of 18 months to two years, that whole thing was transformed. Then MP3 players are being shipped in volumes about 10 times more than they were being shipped before that.
I think it's that sort of second-order effect that we'll see in the smart-phone space with the iPhone; it's actually stimulating lots of other people to go and bring out their own devices.
Why is that because of the iPhone and not any of the other smart phones that are out there?
East: Well, frankly, I think the other players are all a bit sort of...They needed somebody like Apple to come along and shake them up a bit. I mean, Nokias are pretty good (pulls out his N95 smart phone), but this N95 is probably, in some ways, just a little bit shy of an iPhone.
It's the industrial design and the user interface design, which is different. This (gestures at the N95) is constrained by the user interface that you get with the Symbian operating system. And Nokia has a legacy of industrial design. You wouldn't actually need the Nokia (logo) on there to know that it was a Nokia phone. That's a good thing, but it's also slightly a constraining thing. Likewise, you probably don't need to know that it comes from Apple when you see the iPhone.
The different thing about Apple is the combination of the industrial design and the user interface. It creates a desirable product, and from what I've seen in the demonstrations of the user interface, a very usable product as well. Whereas quite a lot of the user interfaces you find are actually quite clunky. They're written by engineers for engineers rather than by engineers for consumers.
Do you think that's because of the fact that Apple controls so tightly the hardware and the software development as a joint effort?
East: Yeah, I think the hardware and software should be inextricably linked in most of these digital products, and historically, they haven't been. And that is a constraint.
If you go visit some parts of the world, and you talk to the software group, and you to talk to the hardware group, you might be talking to two different companies; and not surprisingly, those companies don't perform so well.
Why have you managed to maintain the market share that you have?
East: Because of our ecosystem. You know, with a microprocessor, it isn't just a microprocessor. It's what it takes to build the product and deliver a user experience that's good on that product. No one company can do all that. We have 400-plus companies in our ecosystem, and nobody else does that.
What's preventing them from doing that?
East: The fact that we're doing it, actually. I mean, it's a little bit flippant, but if you're an operating-system company, then you want to supply your products to the biggest possible market so you can get as much money as possible for your operating system. So you're going to look to support an architecture that will take you to the biggest market.
That's the processor that you'll support. ARM has better operating-system support than its competitors, and so we get more market share. We'll become a more attractive target for an ecosystem company, and so the cycle repeats itself. We put quite a lot of effort into that, actually.
In terms of the overall smart-phone market, when do you anticipate that that a handset will become less of a high-end device for executives or business travelers and more of a mainstream device?
I think we're a couple of years away, probably, but as I said, I think the iPhone is going to make a huge difference.
Is it price or features? Why do people need to be convinced that (smart phones) are worth it?
East: Well, it's a bit of both. Some of it's price, some of it is that the technology just hasn't been good enough.
You just need a more efficient engine in order to deliver the multimedia features that people expect and want. If you're not a sort of a technology freak, then as a user, if you have a disappointing experience with something like that--if there are some features there, and it works, but it really doesn't work very well--then you don't go back and buy that for quite a long time.
So the technology availability has definitely been a problem holding back smart phones because you're limiting the market to only those sorts of people who are very tolerant and very prepared to tolerate, frankly, inferior quality.
