[Apple Shockwave]② The Decisive Move 'Semiconductors' Team Cook Has Hidden

Cook's Ambitious A11 Bionic Chip
Focusing on Performance Over Design and Racing Ahead

Editor's Note[Apple Shockwave] is a content series that examines the upheaval caused by Apple entering the semiconductor market. You might wonder why Apple is involved in semiconductors. Apple is no longer just a company that makes smartphones and computers. After long efforts starting from its founder Steve Jobs, Apple has designed world-class semiconductors used in mobile devices. If Intel was the leader in the PC era, Apple has become the top predator in the mobile era semiconductor ecosystem. Amid the global semiconductor supply chain crisis and large-scale semiconductor production line investments, we will carefully examine the upheaval and prospects in the semiconductor market brought about by Apple Silicon to broaden our readers' insights. Apple Shockwave will visit readers every Saturday. After more than 40 installments, it will be published as a book.

[Asia Economy Reporter Baek Jong-min] In September 2017, the new Apple headquarters 'Apple Park', a legacy of Apple founder Steve Jobs, opened. The first Apple product launch event was held at the 'Steve Jobs Theater' named after the founder Jobs. It was no ordinary event. It was a ceremony commemorating the 10th anniversary of the iPhone launch. The world's attention was focused on it.

Apple CEO Tim Cook confidently took the stage. Since Cook succeeded Jobs, he had rarely shown this level of confidence. Behind Cook on the podium, Jobs' face appeared on the screen. Paying tribute to Jobs, Cook then introduced the 'works' commemorating the 10th anniversary of the iPhone announcement. After the iPhone 8, Cook said, "One more thing." It was the iPhone X. When the iPhone X appeared on the screen, the audience cheered in unison.

Following Cook, Phil Schiller, then Senior Vice President of Marketing, emphasized the A11 Bionic chip used in the iPhone 8 and iPhone X. Then, results showcasing the performance of the A11 appeared on the screen. The audience murmured at the performance figures that exceeded expectations.

A video explaining the design of the iPhone X was then shown. The narration was the voice of Chief Design Officer Jony Ive.

Ive emphasized the design of the first iPhone without a physical home button. He then spoke about the excellence of the camera and the A11 chip. It felt somewhat awkward. A designer talking about performance. The iPhone X was a product commemorating the 10th anniversary of the iPhone, created by Ive and Jobs together. It is not hard to imagine how much effort Ive put into the design. Ive's voice emphasizing performance rather than the beauty of Apple products was different from previous iPhone presentations. Unlike Cook's vigorous voice, Ive sounded drained. Ive's face, sitting next to Jobs' widow Lauren Powell Jobs and watching the presentation, was also somber.

There was reason for that. The iPhone X featured the most revolutionary design change since the iPhone's debut. With the home button gone, the full-screen display filled the entire phone. The smooth curves and stainless steel finish remain impeccable even today. Many still use the iPhone X and highly praise its design. What about the design of subsequent iPhones? It is hard to call it a major advancement. The iPhone X design was used through the XR and XS to the iPhone 11. The only notable change in the 11 was the camera, which was criticized as an "induction" bump. From the iPhone 12 to the 14, Apple reused and reinterpreted the iPhone 5 design. This design approach does not align with Apple's long-standing reputation as a 'design company.' The core of the 'Ive iPhone' was design innovation, but Apple's policy was focused elsewhere. The core choice made by Cook was semiconductors.

Trip Mickle, a New York Times reporter, described Ive's feelings at the time in his book "After Steve": "Ive recalled the time before Jobs returned to Apple in 1999 when executives focused more on how powerful the chips were rather than how beautiful the computers looked." That was when Apple was in crisis due to emphasizing performance over design, and Ive was about to leave. After Jobs returned, Ive shared his vision emphasizing design and introduced the iMac, iPod, MacBook Air, and iPhone in succession. Everyone admired the new Apple product designs. But in just over 20 years, Apple transformed from a company emphasizing design to one emphasizing semiconductor chip performance. The designer was emphasizing engineering.

iPhone X

Afterward, Ive left Apple. On the day Apple publicly announced Ive's resignation, who could have been Jobs' successor, Apple's stock price dropped 1%. That was all. Since then, Apple's stock price has soared, making Cook's choice of performance over design a masterstroke.

The introduction of the A11 Bionic chip was Cook's decisive hidden ace. The performance of the A11 revealed by Apple exceeded expectations. It surprised specialized semiconductor companies like Samsung, Qualcomm, and Intel. It outperformed not only the Samsung Galaxy S8, sold around the same time, but also Intel's 'Core i5' chip used in Apple MacBook laptops. It was a scene that chilled the giant Intel semiconductor industry. The achievement, unbelievable for just one year of change, made it difficult for competitors to catch up in the short term. It was truly a 'leap ahead' (the phrase 'leap ahead' was a slogan Intel used in 2006 to assert it would not relinquish technological leadership in the CPU market).

Criticism that the iPhone had beautiful design but inferior performance compared to Samsung Galaxy S was completely reversed. No one could now challenge the iPhone's performance. Cook's decision to choose semiconductors over design was correct. The iPhone 8, iPhone X, and A11 were important milestones in Apple Silicon history.

"The iPhone has had a greater impact on our lives than any other device. Now, we introduce the product that will shape the next 10 years."

At the iPhone 10th anniversary event, Cook said this. Now, six years have passed since the iPhone X announcement. Over these six years, Cook has kept his promise. The timetable Cook presented, promising to dominate competitors with semiconductors for 10 years, now has four years remaining.

Apple CEO Tim Cook and Chief Design Officer Jony Ive (left) are holding the iPhone X together.

The iPhone is Jobs' creation. When Jobs first unveiled the iPhone, he said, "Apple is reinventing the phone today." But Apple fell into a crisis within just 3 to 4 years. It was because of Samsung. Samsung experienced a major failure with the 'Omnia' smartphone using the Windows Mobile operating system (OS), but soon rose as a serious threat to Apple.

The launch of the Galaxy S3 was a clear signal that Samsung could surpass Apple. Let's look at TechCrunch's September 2012 report on the flagship smartphone competition between Apple and Samsung. TechCrunch reported that the Galaxy S3 sold 20 million units within 100 days, and Samsung rapidly caught up with Apple, overtaking Nokia. The Galaxy S's pebble-inspired design and the device's performance received positive reviews. Meanwhile, Apple, despite launching the iPhone 5, was worried about Samsung's pursuit. There was the 'Antenna Gate' and the Apple Maps fiasco. The performance of the iPhone's heart, the AP, was still below expectations.

Moreover, Apple depended on Samsung for semiconductors. Apple used Samsung-designed APs from the first iPhone. Why Samsung? The first company to offer Apple a chance to supply chips for the iPhone was Intel. As will be discussed later, Intel declined this once-in-a-lifetime deal. They had a ticket to ride the 'rocket' called iPhone but refused to board, a decision that has hampered Intel ever since. The opportunity then passed to Samsung. Apple used Samsung's APs, which they had started dealing with through NAND flash memory for the iPod. Apple used Samsung-designed and manufactured chips up to the iPhone 3GS.

Apple's first designed chip, the A4, was used in the iPhone 4. The A4 was designed by Apple and manufactured by Samsung Foundry. The cooperation between Apple and Samsung was the background for the birth of the iPhone.

Antenna Gate: Shortly after the iPhone 4 launch, many consumers complained that the phone's antenna showed only one bar. Holding the lower left side of the phone actually caused poor call quality. Jobs insisted there was no problem and claimed users were holding the phone incorrectly. This was an example of Jobs' characteristic reality distortion field affecting consumers. Apple appeased customers by providing bumper cases.

Apple Maps fiasco: Apple created its own map application to compete with Google Maps. Led by Scott Forstall, known as the 'father of the iPhone,' the map was launched despite concerns. The result was chaos. After the service launch, complaints flooded in about being directed to wrong locations. Forstall refused to apologize to customers. Cook used this incident as a reason to dismiss Forstall, who was the strongest threat to his position.