Market Overview

Apple Already Working on iPhone 6, iPhone 7 and iPhone 8 Processors (AAPL, TSM)

Apple Already Working on iPhone 6, iPhone 7 and iPhone 8 Processors AAPL, TSM

Apple (NASDAQ: AAPL) is already working on the next-generation processors for several future smartphones.

While the A7 processor is expected to be introduced with the iPhone 5S (and may cut Samsung out of the picture), Apple is reportedly working with Taiwan Semiconductor Manufacturing Company (NYSE: TSM) to build A8, A9 and A9X processors as well.

According to DigiTimes, TSMC and its IC design service partner, Global UniChip, have "secured a three-year agreement with Apple to supply foundry services for the next A-series chips built using 20nm, 16nm and 10nm process nodes."

Interestingly, the report claims that the A8 processor will go into "small volume" production in July 2013, suggesting that Apple may be planning to bring more power to the iPad 5.

The A8 processor could also be earmarked for iDevices not currently in the marketplace, such as a larger iPhone.

There has been some speculation that Apple may one day replace Intel (NASDAQ: INTC) processors with its own chips, but it is unlikely that the A8 will be powerful enough -- or released soon enough -- to accomplish that task.

Thus far, Apple has made no effort to replace Intel in 2013. Intel chips appear in the refreshed MacBook Air and are currently being added to the forthcoming Mac Pro revision. They could also be found within the revised iMac released last fall.

The A8 or A9 processor may also be in development for a next-gen Apple TV. This would provide the device with enough power to begin running high-end apps. It may not pave the way for an Apple TV version of Call of Duty: Ghosts, but should allow for a more advanced version of Angry Birds.

All things likely, however, the A8 chip will likely be reserved for an iPhone -- either a larger and more powerful iPhone (a Galaxy Note III competitor, perhaps?) or the iPhone 6.

While the A8 processor may go into production this year, DigiTimes' sources claim that the A9 and A9X processors will not be produced until the end of Q3 2014. This suggests that Apple's schedule is already set in stone -- and will look a lot like 2013.

Instead of releasing products throughout the year (as it has done in the past), Apple has created a bit of a drought in 2013. No new iDevices have been unveiled or released since October 2013. The next iPhone is not expected to be introduced before August or September -- nearly one year after the iPad Mini arrived in stores.

By holding A9 and 9X production until the latter part of 2014, Apple may be planning a similar strategy for the coming year.

Thus far, that strategy has worked as well. The iPhone 5, iPhone 4S and iPhone 4 have continued to set new sales records nearly every quarter since they were released.

Louis Bedigian is the Senior Tech Analyst and Features Writer of Benzinga. You can reach him at 248-636-1322 or louis(at)benzingapro(dot)com. Follow him @LouisBedigianBZ

Posted-In: A7 A8 A9 A9XNews Rumors Success Stories Tech Best of Benzinga


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