Apple Inc. Avoids the Spec War. Again.

Apple has never resorted to competing purely on technical specifications. How does Apple get away with telling consumers so little?

Jul 12, 2014 at 11:00AM


A7 chip in iPhone 5s. Source: Apple.

"Do you know the speed of an A-X processor? Does it really matter at the end of the day? You want a fabulous experience when you use the product."
-- Tim Cook, February 2013

Historically, the competition in the world of consumer electronics has frequently boiled down to technical specs. For the most part, Apple (NASDAQ:AAPL) has been able to avoid spec wars. That's not to say that it can entirely, but Apple is more capable of shifting the basis of competition away from pure specs.

The latest example is a new report that offers possible details of Apple's upcoming A8 chip. The new processor will reportedly remain a dual-core affair but will see its clock speed increase to above 2 GHz. That would be up from the 1.3 GHz to 1.4 GHz speeds found in the A7, depending on device. The A8 will be manufactured on a 20-nanometer process, compared with the A7's 28-nanometer process, and Taiwan Semiconductor (NYSE:TSM) is again named as a manufacturing partner to complement Samsung.

Nowadays, most companies have transitioned to quad-core chips (read: spec war). Some, like Samsung, have even made the jump to octa-core chips. Octa-core chips aren't really as impressive as it sounds, as it's usually an implementation of ARM Holdings' big.LITTLE, where four low-power cores are combined with four high-power cores. Only four cores are active at any given time.

Even Qualcomm (NASDAQ:QCOM) gave in to peer pressure earlier this year, announcing an octa-core Snapdragon also built on big.LITTLE. That was a big departure for the mobile-chip giant, since it has long argued that focusing on better performance on a fewer number of cores is a more sophisticated and effective approach.

The reality is that most apps today don't fully utilize all of the computing power available. Within Android, quad-core processors are nearly ubiquitous, but developing apps to take full advantage of more than two cores is difficult. Even within iOS, most apps don't take advantage of the A7's full dual-core potential, so it makes no sense for Apple to go quad-core.

In fact, Apple never even officially disclosed how many cores are in the A7. Apple also never talks about A-chip clock speeds. The details were only discovered after it shipped and was subsequently torn down. One of the testaments to Apple's all-powerful marketing machine is that it can choose not to disclose some of the most important specs of one of the most important components.

It just tells consumers the bare minimum, such as performance gains or the adoption of 64-bit architecture, but promises a "fabulous experience." The good news is that Apple delivers on its promise, so consumers keep on buying.

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Evan Niu, CFA, owns shares of Apple and Qualcomm. The Motley Fool recommends Apple and owns shares of Apple and Qualcomm. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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