Apple (NASDAQ:AAPL) typically integrates top-of-the-line graphics processor IP from Imagination Technologies (NASDAQOTH:IGNMF) into its A-series processors, which allows the company's iPhone and iPad products to deliver best-in-class gaming performance. I believe that with the next-generation iPhone -- which I'll refer to as the iPhone 6s -- will bring a pretty substantial boost in gaming performance from the iPhone 6.
New Imagination GPUs, FinFET manufacturing technology
Imagination Technologies announced a next-generation set of graphics processor IP known as the PowerVR Series 7XT. According to Imagination, the Series 7XT processors -- in three industry standard benchmarks -- show an improvement of between 35% and 61% in the same configurations at the same frequencies.
So, if Apple were to swap in a 4-core Series 7XT graphics processor into its A8 chip (which is built on Taiwan Semiconductor's (NYSE:TSM) 20-nanometer manufacturing technology), that could lead to a pretty solid performance improvement on its own. However, Apple is very likely to build its next-generation A-series processor on a 14/16-nanometer FinFET manufacturing technology, which, in itself, promises to bring performance/power benefits.
I believe that on these new manufacturing technologies, Apple will actually be able to run this new graphics IP at higher frequencies while maintaining similar battery life, leading to even larger performance gains.
Gaming could be an interesting way to sell new devices
In the mobile processor industry, there seems to be a lot of focus on graphics performance, and for good reason. Gaming is one of the few applications consumers use that can use up every last ounce of graphical processing power available. No matter how fast a graphics processor gets, it can be brought to a crawl by a sufficiently advanced game running at increasingly high display resolutions.
Now, that's not to say that Apple can get away with "just" increasing performance in each generation with the expectation of continuing its record device sales. However, I do think improving gaming/multimedia capability in each generation will be critical to the value propositions of future iPhones (and smartphones in general).
iPhone 6 to iPhone 6s should be a bigger leap than iPhone 6 was from iPhone 5s
For the iPhone 6, Apple moved from a PowerVR G6430 GPU built on Samsung's (NASDAQOTH:SSNLF) 28-nanometer technology to a PowerVR GX6450 GPU built on TSMC's 20-nanometer technology. Apple claimed a performance boost of 50%, and this was achieved in some performance tests, but in other tests, the improvement was less impressive.
Now, in that case, Apple moved from a 28-nanometer process to a 20-nanometer process as well as the G6430 to the GX6450, which definitely brought performance/efficiency gains. However, thanks to the new FinFET structure at the 14/16-nanometer manufacturing technologies, the performance boost from the manufacturing technology alone seems as though it should be larger. The GPU architecture improvements look like they could be bigger, too.
It's up to Apple to sell this improvement
I'm pretty confident the iPhone 6s will offer very impressive performance in graphics. That, coupled with the rumors that the next iPhone will feature not one but two gigabytes of memory, should make the iPhone 6s a substantial performance upgrade over the iPhone 6 and an even bigger jump from the iPhone 5s.
What Apple's marketing department will need to be able to do is to sell this performance to users of older iPhones, particularly 5s and older. I look forward to seeing what marketing "angle" Apple takes with the 6s, and how much of the marketing message will be centered on performance.