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Did the Apple iPad A4 Chip Cost 1 Billion Dollars?

by on February 22nd, 2010

One of the most interesting revelations of Apple’s iPad announcement was that the A4 processor was made in-house by Apple. Why would Apple go this route? Reasons include their obsession with controlling every single aspect of software and hardware design. Knowing what they are working with will turn a good product into an amazing product.

Also, by creating the chip in-house, Apple reduces its dependency on other chip makers, plus they call the shots. It will also be a lot cheaper too right? Well, a recent report from the New York Times estimates that Apple spent $1 billion dollars developing their A4 processor.

Yes, $1 billion. Personally, I think this number is a gross exaggeration to develop ONE chip. Unless, this A4 chip has the ability to last a few years for multiple devices. Then again, Apple does have enough cash in the bank to devote to R&D of a new chip like the A4.

It can be an extensive investment to create a process from scratch, and the A4 is just that. What makes the A4 incredible is the low power consumption yet retaining processing power. You’ve seen those videos of the iPad in action right? It definitely is blazing fast.

It would be very interesting to see what other in-house made chips are being made by Apple. What do you think? Is $1 billion a reasonable amount to spend on developing a new mobile processor from scratch?

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Posted under: iPad News

  • TK

    For Apple yes,
    For most others, no.

    Keep in mind that apple will use the A4 in many i*s , so the cost is amortized over several end products. This enables apple to vertically integrate their componenets to optimize their products. I would be intersted to see how well the A4 stacks uo against atom.