$bbtitle
Apple Stock: 194.34 ( +0.3099 )
RSS RSS Twitter Twitter
Search:
AppleInsider.com Archives News Bytes Reviews Anonymous Mailer Submit Story AppleInsider Forums Mac Prices Polls Advertise on AppleInsider Contact AppleInsider
Save up to $280 on new MacBook Pros and up to $150 on brand new iMacs with special coupons: Mac Pricing Guide updated Nov 6th (Find the best prices on Macs).
Wednesday, April 23, 2008

Apple's PA Semi buyout motivated by assets, not products

By Katie Marsal

Published: 07:30 PM EST

Despite speculation that Apple's acquisition of PA Semiconductor was motivated by the chip maker's specific products, a new report reveals that the iPhone designer is interested more in the buyout for its promises of intellectual property and development expertise -- and may be causing a crisis for the US Department of Defense in the process.

On Monday, just two days before the $278 million buyout was exposed, PA Semiconductor was known to have warned customers that a buyout by a then-unnamed company was entirely disconnected from its existing and future architectures, according to EETimes.

Instead, the buyer (since identified as Apple) is focusing on more abstract intellectual developments and engineering staff, leaving the door open to the use of Intel's Atom platform for future Apple designs.

PA Semiconductor is best-known for developing very high efficiency embedded processors, such as a dual-core, 64-bit PowerPC-based chip that runs at 2GHz but uses only 15 watts of power. While the product itself no longer useful to Apple, which has switched all its computers to Intel's x86 architecture, the achievement itself has drawn attention from since its launch in February of last year by outperforming other rivals in the field while simultaneously running more efficiently.

Nonetheless, Apple's takeover may leave many of those customers -- and the US military -- hanging out to dry, according to an unnamed employee of one of the affected firms.

Though still considered a startup company, PA Semiconductor has already encountered unprecedented success in selling its products and is heavily invested in military technology. More than 10 defense devices, including some from Lockheed Martin and Raytheon, already use the young electronics firm's PWRficient processor to varying levels across every branch of the US armed forces. This bucks conventional industry wisdom, which hesitates to use brand new technology until well-tested.

"I've never seen such fast adoption of a product in the [military aerospace] world," the alleged insider says.

Apple, however, is said by PA Semi to be uninterested in continuing development of those chips and may farm out production on end-of-life terms only if it can transfer a third-party technology license. That will leave many of the smaller company's present-day customers without a long-term source of parts and is already seen as problematic for military contractors like Raytheon, which often spend "many" years developing and maintaining combat equipment.

The risk of an abrupt processor supply cutoff is also reportedly enough that the US Department of Defense may be compelled to plead its case to Apple. No intervention is currently underway, but one is described as possible should PA Semi's customers, and thus DoD part suppliers, grab the attention of the government branch.

"We've had customers saying they are going to the DoD on this one," the source claims.

For its part, Apple remained silent on the reasoning and effects of the acquisition during its second-quarter conference call.

Filed under : Future Hardware 105 Comments ] 
Story topics: Atom, Intel   Print ] [ Story Link ] 


Pre-Order VMware Fusion 3
RSS
RSS
RSS
Mac Poker players can play Full Tilt Poker for Mac and get 100% to $600 free with bonus code MP600, courtesy of Online Poker Mac
AppleInsider Features
Hot Forum Topics

Recent Articles
Doom game creator suggests Apple embarrassed about iPhone gaming
Report: Apple to launch Verizon iPhone in Q3 2010
Apple unveils holiday shopping in-store pickup option
Apple's Broadway store to open Saturday, Nov. 14
Bizarre lawsuits connect Apple with Sarah Jessica Parker, Lil' Wayne
Apple predicted to countersue in legal battle with Nokia
Windows 7 tops Vista software sales, lags behind in hardware
Report: Apple testing RFID swipe support in iPhone prototypes
Inside Google's Android and Apple's iPhone OS as core platforms
Apple looks to hire new iPhone OS security manager
Apple investigating 'Grab & Go' simplified cross-platform sync
Apple co-founder Steve Jobs named Fortune 'CEO of the Decade'
Review roundup: Motorola Droid, Verizon's first Android handset
Apple's latest 10.6.2 beta packs fixes for VMWare, iMacs, Apple TV
Latest Snow Leopard build resurrects Atom compatibility
Bell, Telus provide new iPhone competition in Canada
'Art project' video game attacks Apple Mac machines
Hacker cracks Apple's latest iPhone 3GS security measures
The Beatles go digital with apples, but still not Apple's iTunes
Apple announces App Store offerings top 100,000
Apple launches iTunes Music Movies with exclusive content
Parallels Desktop 5 for Mac claims speed superiority
AT&T brings lawsuit against Verizon over 'Map' ad campaign
Canalys Q3 2009: iPhone, RIM taking over smartphone market
Hit-or-miss site claims 4G iPhone part; French exclusivity ends
Despite disappointing China debut, iPhone's 2010 predicted to be strong
Philadelphia's first Apple store moves closer to reality
Exclusive look at Apple's new iPod touch-based EasyPay checkout
China Unicom gains 5,000 iPhone subscribers from launch
iPhone makes enterprise market inroads for Apple
Apple pitches $30-a-month iTunes TV subscriptions - report
Apple's iPhone sees tepid sales debut in China
Apple's 2010 capital expenditures could signal major investments
Apple rumored to disable Atom support with Mac OS X 10.6.2
Apple advertising guru says he's 'not going anywhere'
First Look: Apple's 27" big screen iMac
Last chance this year to save an extra 3% on iMacs, white MacBooks
Visionary behind Apple's '1984' advertisement steps down
Flash playback issues reported on Apple's new 27-inch iMacs
Apple expands school initiative with Atlanta MacBook program

AppleInsider Market Place

Sell your Laptop - working or not. Free shipping.: Get an instant online quote and sell your laptop today !

Believe in Office: Save Up To 25% on Office 2004 For Mac. Visit Our Site for Details!

IBackup - SMB Online Backup: IBackup is the preferred online storage and backup service of choice for SMBs for its ease of use, security and value. Offers automated backup and restore, file selection and securiy.

Download free software - everyday updated freeware files

 
Advertisements








AppleInsider RSS Feed
AppleInsider © 1997-2008
Please review our Privacy Policy.
Written/Edited/Compiled by the AppleInsider Staff.