Apple 3.0 Podcast: Ben Bajarin on Apple’s secret sauce

You can buy your smartphone chipsets off the shelf or you can design your own.

Apple prefers the latter, and the teams of semiconductor engineers it has assembled are the envy of the industry.

Ben Bajarin, principal analyst at Creative Strategies and the voice of Techpinions, is the only analyst I know who has worked as a semiconductor software engineer. He’s toured the Asian supply chain and he believes Apple has an edge in proprietary, custom-made silicon that even Samsung will be hard-pressed to duplicate.

Got a half-hour commute ahead? Let Tim Bajarin’s grown-up son give you the lay of the land.

Here’s the link.

If you enjoyed this podcast, feel free to plug it on iTunes or Overcast. If you’d like to hear more interviews like this, the best thing you can do is subscribe to Apple 3.0. Try it for $10 a month or sign up for $100 a year. Subscribers get my investor news three days before it goes public and a free pass to one of the most civilized Apple discussion boards on the internet.

7 Comments

  1. Fred Stein said:
    Ben addresses, and refutes, the “commoditization of hardware.” With the modular approach, the integrators who use other’s IP – chips, OS, compilers, etc. have no advantage, hence no ability to price substantially above BOM cost. No surprise that Apple has nearly all the profit in the SmartPhone market.

    Ben also addresses the long view. Apple plans three years from start of design to selling 100 million iPhones using latest silicon. The modular approach does not allow this long-tern optimization. This keeps Apple ahead. Except for Huawei, no other SmartPhone maker can copy this. It would take Samsung or Google several years just to get started and then three years later to reach the market.

    3
    February 27, 2017
  2. Fred Stein said:
    Thanks Philip for bringing this to light – deep innovation in the vertical stack.

    No it is not ‘disruptive’, nor needle mover, nor all the the buzzwords.

    But the future is Android and iOS. iOS has an enduring advantage, better silicon. VCs call it a moat. Most WS analysts don’t see it all.

    3
    February 28, 2017
    • Thanks for your comment about the commoditization of hardware. You followed Bajarin’s argument better than I did, sitting in the sound studio.

      0
      February 28, 2017
  3. David Emery said:
    Unless Apple ramps up its Software QA, their ‘secret sauce’ will grow increasingly bad-tasting. (Sorry, couldn’t help continuing the metaphor.)

    Apple’s software-intensive systems (“it just works”) has been a big advantage, but with both Windows and Android getting better, Apple needs to reverse its trend of at best standing still (but I’d argue Apple software has gotten noticeably worse over the last 5 years.)

    (Recently I’ve seen a bug whereby a video playing in Safari hangs the system, and eventually logs me out. NO EXCUSE for that.)

    0
    February 28, 2017
      • David Emery said:
        OK…. But Apple is still in trouble for SW quality, I believe.

        0
        February 28, 2017

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