Are Apple's in-house chip designs really better?

A New York Times report on Apple’s A4 chip, a custom-designed piece of silicon that powers the company’s new iPad tablet displays, is surprisingly negative on whether Apple gets any benefit from designing custom chips to go with its custom software.

Here’s a boil-down of the negatives from the article:

The do-it-yourself approach gives Apple the chance to build faster, more battery-friendly products than rivals and helps the company to keep product development secret.

But designing its own processors burdens Apple with additional engineering costs and potential product delays. It also forces the company to hire — and retain — experienced chip designers. Several who joined the company in 2008 after an acquisition have already left for a secretive start-up.

Though chip industry experts have yet to put the iPad through their customary rigorous tests, Apple’s demonstrations left them underwhelmed.

“I don’t see anything that looks that compelling,” said Linley Gwennap, a chip analyst at the Linley Group. “It doesn’t seem like something all that new, and, if it is, they are not getting far with it.”

“From what we have seen so far, Apple’s product seems to stack up evenly with the competition,” said Dean McCarron, a chip analyst with Mercury Research. “Clearly, Apple is using their own metric for whatever ‘best’ is.”

Blogger Louis Gray, who follows Apple closely, thinks it’s a given that Apple’s products perform better because of the commingling of hardware and software within the company. The A4 is just a start. Apple is openly hiring chip engineers — in part to replace several who left to join mysterious startup Agnilux, but also, Gray says, to grow a larger team who design custom chips for more and more of Apple’s products going forward.

“There are two giant sucking sounds in the Valley chip design space right now,” Gray claims a chip industry insider told him. “Apple is one of them, and NVIDIA is the other.”

You know what this story needs? An engineer who can explain, in lay English, exactly how the A4 boosts the iPad’s performance over the available CPUs from Intel, Motorola, or whoever. If you’re that engineer, email me at paul@venturebeat.com.

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