Apple Reveals Mobile Strategy That Impacts Many Industries

 Apple’s massively hyped mobile device launch event yesterday in Cupertino, California answered many of the questions we posed last week about their product and technology roadmap.

Spoiler Alert: in last week’s article, we speculated about the manufacturing role that GT Advanced Technology would play — given what we already knew about Apple’s “Project Cascade.” The answer is sapphire covers will be used for the new Apple Watch, which is expected to be available in early 2015 and not for the iPhone 6, at least not at first. The timing makes sense given that the GT Advanced Technology factory in Mesa, Arizona is just now ramping up for large-scale sapphire production.

Apple Conference, image by Digital Trends
Apple Conference, image by Digital Trends

 

Apple Addresses the “Phablet” Form Factor Gap in Its Product Line

Prior to yesterday’s announcement, many press analysts had chastised Apple for missing an opportunity to deliver larger form factor devices that sit somewhere between an iPhone and iPad, e.g. the so-called “Phablet” market. There is evidence that Samsung’s Galaxy was indeed making inroads thanks to its larger screen size. Internal Apple documents disclosed during one of many legal battles between Samsung and Apple over patented technology revealed confidential Apple discussions where executives lamented that their lack of a larger form factor product was indeed impeding iPhone sales.

As expected, Apple has addressed this issue head-on. Apple revealed the final product names (iPhone 6, iPhone 6 Plus), the exact screen dimensions (4.7 and 5.5 in respectively) — all wrapped in a thin, elegant design that builds on the design language of the most recent iPad. It’s also strongly reminiscent of designs by the famous industrial designer Dieter Rams, who was Chief Design Officer at Braun from 1961 to 1995.

 

Apple iPhone 6, courtesy of Apple, Inc.
Apple iPhone 6, courtesy of Apple, Inc.

 

Worth noting: the glass cover on the new design is higher (or “proud” as a product designer or machinist would say) than the surrounding exterior bezel case. Indeed, the edge of the glass is chamfered with a round radius that blends seamlessly into the bezel — very elegant! But this design also makes us speculate that once the cost of large sapphire screens drops and the availability increases Apple may introduce a version of the iPhone with a tough, durable sapphire screen, perhaps as early as next year.

 

Apple Controls the Hardware Design, the Operating System Design and the User Experience. But They Outsource Manufacturing.

Facing competition from industry giants Google and Samsung, Apple continues its unique strategy within the industry of developing an entire end-to-end eco-system for its product line, from hardware design, operating systems, application programming interfaces (API) and software development kits (SDK) to industrial design (ID) as well as user interface and user experience (UX). We can’t help but be reminded of the epic battles in the PC era between Apple and Microsoft. Microsoft dominated the PC industry, but as emphasis has shifted toward smaller mobile devices, consumers have shown a strong preference for elegant, fully integrated designs. And Apple’s integrated approach has given them the upper hand.

If the iPhone 6 performs as well as in the hands of consumers as it did during yesterday’s demo by Tim Cook and other Apple executives, then Apple’s major change shift to a 64-bit operating system announced back in September 2013 may prove to have been the watershed moment in Apple’s product roadmap. For it was last year that Apple shocked the industry with the introduction of their own A7 system-on-a-chip design, which supported the 64-bit instruction set licensed from the UK-based chip design firm ARM. At the time there was a lot of speculation whether the advancement from 32-bit to 64-bit computing was really significant for small mobile devices. Google is not there yet.

They have previewed an Android “L” operating system, which supports 64-bit computing, but it’s not available yet. And high-end Samsung Galaxy “phablets” offer 64-bit hardware, but they don’t have a real 64-bit operating system. Since last year Apple has had both — and yesterday they announced their newest system-on-a-chip design for the iPhone 6 — the A8. This 20nm chip contains 2 billion transistors — making it 25% faster than last year’s A7. Yet supposedly it’s 50% more efficient and will provide longer battery life with better performance. On the flip-side, while Apple designs its chips — it does not fabricate them. In fact, much to Apple’s consternation, it has relied on Samsung to fabricate all its iPhone chips, including last year’s 64-bit A7 chip. No longer. Apple has contracted manufacturing of the A8 chip to Taiwan Semiconductor Manufacturing Company (TSMC) located southwest of Taipei in Taiwan. It’s not yet clear if the next generation of chips, the A9 (speculated to have wiring as small as 16 nm) will be fabricated by TSMC as well or perhaps Apple will have to return to Samsung for its high-technology fab expertise.

 

Three Industry Sectors That Will Feel the Effect of Apple’s IPhone 6

IPhone as Game Console? Yes.

The first industry that will feel the impact of the iPhone 6 is the gaming and entertainment sector. Yesterday, Tim Cook led off the iPhone 6 demo with a new game called Vain Glory authored by Super Evil Megacorp (seriously!) that takes advantage of Apple’s new graphics API called ‘metal‘.

 

 

Vain Glory is a very impressive demonstration of the capabilities of the A8 chip design. Tim Cook announced that their strategy is to make the iPhone competitive or even better than existing gaming consoles. We won’t know for sure if Apple has delivered on the promise this time, but it’s clear the direction that they are taking. In fact last night after the Apple product launch, there was wild speculation that Microsoft would respond by buying the popular Mindcraft game franchise. If this is true, perhaps they are little spooked by Apple’s inroads into the game console market, as the Xbox is one of the few bright spots among Microsoft’s consumer electronic device offerings.

 

Apple Pay. It Could Replace the Credit Cards in Your Wallet

The second industry sector may be the sleeper; we talked about this last week that Apple was in discussions with major credit card companies for some kind of a payment system. Tim Cook announced it officially yesterday, it will be called Apple Pay and it does indeed rely on a Near Field Communication (NFC) protocol, which Apple has built into the A8 chip. This particular chip component is called Secure Element. (Hopefully the name rings true, especially after the fiasco of last week’s hacked celebrity iCloud photos.)

If Apple Pay is successful, this could place Apple at the center of consumer shopping transactions at physical stores. Cook explained Apple Pay will also be used to automate secure transactions online. We will have to see how this works in practice, but this too could have a important long-term impact on managing e-commerce security by leveraging the iPhone’s biometric identity functionality.

 

Apply Pay, image by Square
Apply Pay, image by Square

 

Health Monitoring Tackles Altitude

Like the A7 chip, Apple’s newly announced A8 chip relies on a dedicated motion coprocessor, which is called (logically enough) the M8 chip. (Unfortunately, it’s easy to confuse this nomenclature with the chip in the new ARM-based HTC phone, which is also sometimes called the M8, but these are not related designs.) The M8 motion coprocessor is very sophisticated. Like its predecessor, the M7, it has a built-in accelerometer, gyroscope and compass. Cook announced that the new M8  adds a built-in barometer for detecting altitude changes, such as when you climb stairs. This means that software developers using the HealthKit API to write biometric healthcare apps will be able to access your physical activity and distinguish between things like running or bicycling. The motion coprocessor also works when the device is in sleep mode.

Given the breadth of these new measurement capabilities, as well as the biometric measurement capabilities of the sensational new Apple Watch (which we will discuss next week), we agree with many analysts that Apple is poised to lead a new revolution in healthcare apps. Time will tell. And that in fact is as much time as we have to discuss yesterday’s announcements about the iPhone 6. We will return next week with an in-depth look at the revolutionary Apple Watch and what it portends for industrial design and product engineering trends in the coming year.  

 

Formaspace is Proud to Have Apple Inc. as a Customer

Mobile Monitoring Benchmarx for Two
Mobile Monitoring Benchmarx™

Here at Formaspace we’re proud to have Apple Inc. as one of our customers. We encourage you to join our roster of well-known clients — including Boeing, Dell, Eli Lilly, Exxon Mobile, Ford, General Electric, Intel, Lockheed Martin, Medtronic, NASA, Novartis, Stanford University and Toyota. Why not give us a call today at 800.251.1505 to learn more about our full line furniture as well as our furniture consulting and space planning services.

We offer a complete line of stock, semi-custom and custom-made furniture, including electronic assembly workbenches, drafting tables, computer workstations, industrial workbenches, lab benches, packing tables and more.  All our furniture is Made-in-America right here at our factory headquarters in Austin, Texas. We stand behind our products with the industry’s best guarantee: a full 12 years.

What Is Apple Doing With Sapphire Glass?

It’s that time again. Apple is back in the headlines. Mysterious invitations have gone out announcing that 9/9 is the date, along with the teasing phrase: …wish we could tell you more. Apple-ologists are in a frenzy to scrutinize and analyze every possible hint, including the fact that this announcement will be held at a much larger facility in Cupertino (the site of the original Macintosh introduction) and not at Moscone Center in SF — and that a large two-story box outside the auditorium is being constructed under tarps to keep prying eyes away.

While speculation swirls around the possible introduction of Apple’s next generation iPhone (with larger screen sizes) and new wearable technologies (such as the long rumored iWatch), Apple is also in the news this week for some less comfortable reasons. Press reports point to a possible security breach in Apple’s cloud-based iPhone backup storage solution, known as iCloud, which may or may not be responsible for some very private photos of celebrities circulating around the net.

 

Apple's hush-hush order for sapphire from GT Advanced Technology new Mesa, Arizona facility is fueling rumors that this tough, scratch-resistant material will be part of Apple's product announcements on 9/9. Shown are 130kg and 100kg sapphire 'boules' (with diameters up to 15" and heights up to 13") grown the GT Advanced Technology factory in Salem, Massachusetts.
Apple’s hush-hush order for sapphire from GT Advanced Technology’s new Mesa, Arizona facility is fueling rumors that this tough, scratch-resistant material will be part of Apple’s product announcements on 9/9. Shown are 130kg and 100kg sapphire ‘boules’ (with diameters up to 15″ and heights up to 13″) grown in the GT Advanced Technology factory in Salem, Massachusetts. Image courtesy GT Advanced Technology.

Like Others in the Manufacturing Arena, We Follow Apple News with Great Interest

Late in 2012, Apple broke ground on a new 39-acre, $304 million Americas Operations Center campus, located not far from our furniture manufacturing headquarters here in Austin, Texas. The first phase opened earlier this year — two buildings comprising 290,000 square feet, which house Apple technical support staff, operations personnel and hardware engineers. When all the planned construction is completed in 2021, Apple will be in possession of a million square feet of office space co-located on their Austin campus.

 

GT Advanced Technologies and Undisclosed Details of Apple Contract to Deliver Sapphire Screens or Lenses

We’ve also been following developments at GT Advanced Technologies (GTAT) in Mesa, Arizona, which is located not too far from Chris Andrews, Formaspace’s VP of Sales and Marketing, who calls Phoenix home. GTAT is apparently under contract to deliver a huge number of sapphire screens or lenses to Apple. The details of this are still secret, but we will take an in-depth look at GTAT’s fascinating manufacturing technology for producing large single crystal sapphire material later in this report.

We can only imagine the pressure that Apple product designers and manufacturing specialists are facing in a world where rumors about Apple product developments grab front page headlines. Apple is dogged by the same kind of invasive sleuthing paparazzi that targets Hollywood celebrities or the British Royal family— with a fanaticism that at time seems to cross over the line into outright industrial espionage.

 

When Will We See Manufacture of ‘Wearable’ Apple Technology?

When we last looked at Apple back in May, we speculated on the impact new flexible film technologies under development in research laboratories could have for future product designs, particularly wearable computing products. And we thought at the time there was a good chance that Apple would introduce their long rumored iWatch product with health measurement capabilities. Since that time, other manufacturers, including fashion clothier Ralph Lauren (via their Polo sportswear line) have introduced apparel products like compression athletic shirts which feature built-in sensors to measure heartbeat and other health metrics. The Washington Post has a good summary of the speculation surrounding Apple and the potential success of these newest ‘wearable’ designs.

 

 

Ralph Lauren - Polo Tech // a compression shirt with biometric sensors, image by Pinterest
Ralph Lauren – Polo Tech – A Compression Shirt with Biometric Sensors, image by Pinterest

 

Electronic Commerce May Be the Most Important Apple Announcement

Apple fangirls and fanboys have worked themselves up into a veritable frenzy about whether the new iPhones that are expected to be introduced on the ninth will have larger screens to compete with Samsung’s Galaxy phone. There’s intense speculation about whether Apple will introduce an iPhone ‘Air’ and whether it will be a ‘phablet’ (halfway between a phone and a tablet) — or not. A video posted on MacWorld’s UK website is worth watching to get a taste of the extreme lengths Apple journalists are taking to extract any possible insight from available clues, ranging from the typography in invitations to what appears to be surreptitious industrial espionage at Chinese factories.

Yet the biggest long-term impact of a potential Apple announcement next week could be in the form of a novel new payment system that tightly integrates credit cards like Visa and MasterCard with the iPhone. A so-called Near Field Communication (NFC) capability, rumored to be built into the next generation iPhones, could allow users to pay for goods and services with a quick swipe of their iPhone.

 

The Immense Scale of Apple’s Manufacturing Ramp Up

The Wall Street Journal is reporting that Apple has placed a record manufacturing order for production of new iPhones, with up to 80 million units on order for the initial production run. The Wall Street Journal is also reporting Apple has requested their manufacturers to be prepared for production of up to 120 million iPhones by the end of calendar 2014 in order to provide a little bit of slack in the supply-chain prior to the Lunar New Year celebrations in February 2015.

Apple is reportedly contracting with the Chinese electronics manufacturing giant Pegatron for assembly of a 4.7 inch iPhone, and with Hon Jai Precision Industry Co, more commonly known as Foxconn, for the 5.5 inch screen versions. Apple’s chief executive Tim Cook has reportedly expressed concern that the supply-chain for this next generation of products is very complex. Other analysts believe that the production of the larger 5.5 inch screens, which use ‘in-cell’ technology that integrates the LCD display with the touch sensor (rather than relying on two separate layers) could cause production delays.

 

Big Manufacturing Challenges for Apple Amid Distractions and Setbacks

Industrial manufacturing accidents are also a risk. Just this past August, an accidental explosion at a metal polishing manufacturing facility in Kunshan China, outside of Shanghai, killed nearly 70 people and injured 187. Preliminary speculation on the cause of the manufacturing accident at the Taiwanese-owned Zhongrong manufacturing plant focused on combustible aluminum, steel or other metal dust which can accumulate in ventilation systems during sanding and polishing operations. It is not known if this plant was under contract by Apple; a similar accident occurred in 2011 at a plant in Chengdu that produced Apple iPads; that accident killed three manufacturing plant workers and injured 15.

 

Caution: some of the images in the video are quite disturbing.

 

American Expertise in Manufacturing Sapphire

On the manufacturing side, there is much speculation surrounding the relationship between Apple and Nashua, New Hampshire-based GT Advanced Technologies (GTAT) which is a leading manufacturer of highly technical furnaces capable of growing man-made sapphire ingots, which — taking a terminology from bread baking –are more commonly known in the industry as sapphire boules. We won’t know until next week after Apple makes its announcements if sapphire has made the cut for inclusion in the newest generation of Apple products.

Presently sapphire, which has a hardness of nine out of 10 on the mohs scale (just one short of diamond’s perfect 10) is used for the protective transparent cover on the Apple iPhone 5 camera lens, as well as the protective cover for the fingerprint recognition device built into Apple’s higher-end phones. Speculation is rampant. We take note that sapphire is the birthstone gem for the month of September — that’s as good a basis for speculating that sapphire will be part of Apple’s announcements on 9/9 as most rumors we’ve come across.

 

Apple’s Project Cascade Signals More American Manufacturing

Apple has reportedly signed contracts with GTAT to change its business model from a manufacturer selling sapphire production technology to factories across the world to become a contract manufacturer supplying sapphire boules to end customers — like Apple. And perhaps for Apple and Apple alone; it’s not yet known if the contract established an exclusive arrangement or not. This initiative by Apple, known as Project Cascade, has bankrolled GTAT to expand outside its traditional manufacturing operations in Massachusetts. They are refurbishing and re-opening an unused factory in Mesa, Arizona (once the home of now bankrupt First Solar).

The arrangement has been very secretive. During an earnings conference call this past August, GTAT CEO Tom Gutierrez was understandably cagey about disclosing the scope of their Apple manufacturing business, lest he tip off Wallstreet stock analysts and Apple fanboys about Apple’s future product line. According to Barron’s, Gutierrez curtly cut off questions by Goldman Sach’s Brian Lee about the Apple contract:

I have to sidestep it’s a little bit I really can’t speak to the volumes or the applications where the timing of Apple’s business. We can speak to the fact that we are starting to ramp up production and moving to volume manufacturing. We can talk to the startup challenges that we’ve had. This is one very massive undertaking that we taken on. But I really can’t, and for others who might be on the line were going to ask me some of the questions, really discuss Apple’s trotted line plans or timing.

An Example of American Manufacturing Expertise in the Making?

In fact, it appears that GTAT’s transition from a manufacturing equipment supplier to an end product manufacturer has come so recently that they haven’t yet been able to update their marketing materials to reflect the dramatic shift. After a little digging, we found this very interesting GTAT promotional video (no longer on their YouTube channel, probably because it promotes their factory technology sales).

 

 

The video provides an overview of the long, arduous process of starting from a crystal seed to final production of a large sized sapphire boule; the whole manufacturing cycles takes an astonishing 16 – 17 days from start to finish! We have a fingers crossed for GTAT. If this project reaches its full potential, it represents a dramatic endorsement of the resurgence in American manufacturing. We look forward to the Apple announcements early next week and we will be back after that with an assessment on what we’ve learned and what it means for the manufacturing industry.

Formaspace is Part of the American Revolution in Manufacturing

Here at Formaspace we take great pride in providing industrial furniture solutions for manufacturing. We offer a complete line of stock, semi-custom and custom-made furniture, including electronic assembly workbenches, drafting tables, computer workstations, industrial workbenches, lab benches, packing tables and more. We encourage you to join our roster of well-known clients — including Apple Computer, Boeing, Dell, Eli Lilly, Exxon Mobile, Ford, General Electric, Intel, Lockheed Martin, Medtronic, NASA, Novartis, Stanford University and Toyota.

All our furniture is Made-in-America right here at our factory headquarters in Austin, Texas. We stand behind our products with the industry’s best guarantee: a full 12 years. Why not give us a call today at 800.251.1505 to learn more about our full line furniture as well as our furniture consulting and space planning services.