[Apple Shockwave]⑥ The AirPods That Were Called 'Like Bean Sprouts' Became a Huge Hit... The Secret Is the 'W Chip' Inside

Success in Differentiation from Competitors at Once through W Chip
Park Tae-hwan Headphones Also Upgraded with Apple Semiconductor

Editor's Note[Apple Shockwave] is a content series that explores 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 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.

W1 chip and Apple AirPods 1st generation. This product uses the W1 chip, demonstrating superior performance in connectivity and battery life compared to existing wireless earphones.

Apple pursued the integration of software and hardware. After securing its own operating systems (OS), it moved to secure semiconductors. After acquiring two operating systems?computer (macOS) and smartphone (iOS)?Apple began developing semiconductors in-house, which it had previously relied on externally. The semiconductors Apple created are used exclusively in products manufactured by Apple. This means no one other than Apple can use Apple’s semiconductors. Typically, most semiconductors are general-purpose. It is rare for them to be designed exclusively for a specific brand’s products. Apple broke this convention. Is Apple Silicon used only in devices that require an operating system? No. Apple actively uses semiconductors in its products. If you are using an Apple product now, it means you are encountering Apple semiconductors.

Even Park Tae-hwan headphones using Apple Silicon have changed. The official retail price of Apple’s wireless earphones, AirPods Pro 2, released last year, is 358,000 KRW. It is so expensive it makes you say “wow.” The price tag is comparable to that of a low-cost smartphone. The first AirPods, launched in 2016, cost $150 in the U.S. AirPods is a product led by Apple CEO Tim Cook. Tim Cook applied Apple’s self-developed semiconductor to AirPods. The result was a huge success. AirPods, once criticized for their “bean sprout” design, have become a cash cow for Apple.

The 'Magic' That Transformed Park Tae-hwan Headphones, Once Mocked as 'Hundreds of Dollars Worth of Headbands'

AirPods, introduced by Cook alongside the iPhone 7, removed the “wire” that was symbolic of Apple from wired earphones called “EarPods.” Steve Jobs used white wires for the iPod’s earphones. At a time when most earphones were black, the white wire was an “icon” representing “I am an iPod user.” Apple actively promoted the image of using white earphones. However, Cook completely eliminated the wire. What about the design? It was met with ridicule such as “It looks like it will fall off if you shake your head” and “bean sprouts.”

Cook’s confidence in AirPods was backed by a semiconductor: the “W” chip. Apple succeeded in differentiating itself from competitors at once through the W chip. It broke the notion that wireless earphones are convenient but difficult to use.

The W1 chip acted as a kind of “messenger” linking the iPhone and AirPods. By automatically connecting AirPods and the iPhone, the W1 enabled the “crazy connectivity” that was the key to AirPods’ success. While existing wireless earphones passively used wireless technology called Bluetooth, AirPods were different. Bringing AirPods with the W1 chip close to an iPhone automatically paired them. Even a child could use it. The complicated Bluetooth pairing process disappeared.

Apple Silicon semiconductors have also dramatically upgraded the performance of finished products. One example is the wireless headphone brand “Beats,” acquired by Apple. Beats headphones gained fame when swimming star Park Tae-hwan used them at the 2008 Beijing Olympics. Besides Park Tae-hwan, many famous domestic and international stars used Beats headphones and earphones.

The popularity of Beats, influenced by hip-hop star Dr. Dre, was due to its eye-catching design. Although the performance was “so-so,” the design alone made it a trendy item. As a result, despite its fame, Beats wireless earphones were criticized for not being worth the money. They were mocked as “hundreds of dollars worth of headbands.”

Cook acquired Beats in 2014 for $3 billion (about 4 trillion KRW). Three years later, Cook implanted Apple Silicon into Beats. Apple embedded the same W1 chip used in AirPods into Beats. The result was dramatic. It is reminiscent of Iron Man receiving the Arc Reactor in his chest and becoming a superhero.

Compared to the previous “Beats Studio 2,” the “Studio 3” with an Apple Silicon heart achieved a leap in performance equivalent to changing a car engine. It was a facelift akin to a full model change. Studio 2 could be used for 12 hours without charging when noise-canceling was active, but Studio 3 could be used for 22 hours. When noise-canceling was off, usage time was up to 40 hours. Charging was also improved: 10 minutes of charging allowed 3 hours of music enjoyment, and 15 minutes of charging allowed 5 hours. Pairing with the iPhone also became simpler.

Before being acquired by Apple, Beats was used by Android smartphone users as well, but through semiconductors, it joined the Apple ecosystem. Apple did not put Apple Silicon in all Beats earphones. Beats earphones without Apple Silicon are low-priced and lack automatic connection with the iPhone. They use other chips instead of Apple’s semiconductors. The W chip evolved into W2 and W3, transforming from ear semiconductors to wrist semiconductors. The Apple Watch uses W2 and W3.

Apple upgraded ear-worn semiconductors with the H chip. The H chip is armed with performance on a different level from the W chip. Apple explains that the H1 chip has performance comparable to the iPhone 4. The chip “A4” used in the iPhone 4 sold in 2010 was applied to earphones. The “H2” introduced last year is even more astonishing. H2 performs 48,000 calculations per second. This is at the level of the A9 and A10 chips used in iPhones. Apple allowed earphones to have the performance used in iPhones until 2016. Why did Apple make this choice? The keyword “health,” which Cook has continuously pursued, is cited as the reason high-performance semiconductors are used in AirPods.

The feature of AirPods Pro 2 using H2 is ambient sound transparency. This feature is why the MZ generation can use AirPods Pro 2 even during work. H2 detects ambient sounds and automatically filters out noises that could damage the ears. At the same time, it allows normal sounds to reach the eardrum so users can naturally converse with people around them.

When paired with the iPhone, H2’s amplification function makes only conversations louder. It acts as a digital hearing aid. Cook is a manager obsessed with health. He upgraded the Apple Watch, which Johnny Ive started as a fashion accessory, into a health tool and achieved great success. Cook’s intention becomes clearer through the H2 chip.

If you try the amplification mode of AirPods Pro 2 when you cannot hear the voice of a masked person during a meeting, you can feel the change. This suggests that the digital hearing aid market, which is much more expensive than AirPods, is Apple’s next target.

Apple is already moving toward this goal. Bloomberg recently reported that AirPods will transform into devices supporting hearing within next year, or at the latest within two years. This is entirely possible if Apple obtains approval from the U.S. Food and Drug Administration (FDA). Hardware preparations have already been made through H2. It is entirely feasible with the semiconductors Apple has embedded in AirPods.

Could other companies make earphones using excellent semiconductors? This is where the gap with Apple arises. Apple uses semiconductors it produces itself only in its products. Even if it develops and applies new semiconductors, massive sales volumes reduce the burden. Competitors find it difficult to produce dedicated semiconductors for earphones. They can hardly even attempt it. Even if they try to buy other chips, it is hard to find semiconductors that perfectly fit their needs. They have to use general-purpose products. Even if they acquire semiconductors, efforts to integrate them with software are required. This gap differentiates Apple AirPods from other earphones.

Fake AirPods Appear After Semiconductor Hacking

A YouTuber is demonstrating a Chinese counterfeit AirPods paired with an iPhone, using a cloned W1 chip. The counterfeit AirPods operated just like the original AirPods. Photo by YouTube

There have also been loopholes. “ChaiPods” and “JjapPods” are what consumers call fake AirPods that can be bought for 40,000 to 50,000 KRW. ChaiPods are almost indistinguishable from AirPods in packaging and product appearance. They can be paired with iPhones like AirPods. While packaging and design can be imitated, mimicking the connectivity of Apple’s products is difficult.

Why? Because they use semiconductors hacked from the W1 chip. It has been confirmed through fake AirPods that using Apple’s semiconductors can secure similar performance. The W1 chip was replicable because it used relatively low-level semiconductor technology, but this is impossible with the latest A and M series. Reports continue that Apple has reserved the entire latest 3-nanometer process at Taiwan’s TSMC. This means replication is impossible without going through this process.