Bad News for Intel: Apple Buys P.A. Semi

Apple has reportedly agreed to purchase microprocessor design company P.A. Semi, according to China's Xinhua news agency and a story on Forbes.com.

The stories quote Apple's Steve Dowling as saying that P.A. Semi is known for its design of sophisticated, low-power chips, which will be used in future iPhones and maybe iPod products.

"Apple buys smaller technology companies from time to time, and we generally do not comment on our purposes and plans," according to Dowling. He wouldn't comment on the exact price paid -- but it is rumored that it is costing Apple $278 million dollars in cash.

Apple Chief Executive Steve Jobs and Senior Vice President Tony Fadell reportedly led the tiny group of executives who spearheaded the acquisition, which included negotiations that took place in Jobs' home.

Cramer: A Bull Case for Apple

P.A. Semi is a 150-person boutique chip company, based in Santa Clara, Calif., that was founded in 2003 by Dan Dobberpuhl, a lead designer for Digital Equipment Company's Alpha and StrongARM microprocessors developed by in the 1990s.

The new, power-efficient Power Architecture chip is called PWRficient. It is based on the PA6T processor core -- the first to be designed from scratch outside the AIM (Apple, IBM (IBM - Cramer's Take - Stockpickr), Motorola/Freescale (MOT - Cramer's Take - Stockpickr)) alliance in a decade.

Apple's purchase could be very bad news for Intel(INTC - Cramer's Take - Stockpickr). The industry leader had been trying to convince Cupertino, Calif.-based Apple to rely on Intel's chips -- particularly its newest low-power processor, called the Atom.

Apple had been a big user of Power Architecture chips before switching from PowerPC to Intel chips in its Mac computers a few years ago. There had been rumors that Apple would have been the first user of PWRficient processors before the move to Intel.



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Gary Krakow is TheStreet.com's senior technology correspondent.

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Version 1.0 of Yahoo's new platform due later this year

During a post-keynote luncheon with a few reporters, Yahoo CTO Ari Balogh and Yahoo Open Strategy (Y!OS) chief architect Neal Sample shared more details about the inside-out rewiring of the Web giant.

Balogh said that co-founder and CEO Jerry Yang is taking a personal interest in the project, which began in earnest as part of Yang's 100-day plan, which he created when he took the helm of the company from Terry Semel in September of last year. He noted that Y!OS was started before Microsoft came knocking on Yahoo's door. Balogh joined Yahoo from VeriSign just prior to Microsoft's February 1, 2008 takeover bid.

Y!OS is expected to have a material impact on Yahoo's page growth and time spent on the site, as well as revenue. It was baked into the calculations projecting a doubling of its operating cash flow from $1.9 billion to $3.7 in the three-year span.

Version 1.0 of what is being called Y!Open will be released at some unspecified time later this year, and will include a development environment for several properties, a social "activator" and graph engine, an events engine, and a single profile for users, Balogh said.

The activator engine handles the combining of different relationship groupings, such as the Yahoo Mail e-mail address book, Yahoo Messenger contacts, Flickr friends, Yahoo 360, and Yahoo Mash, Sample said. Yahoo will be careful to protect user privacy and won't apply the information without user consent, he added.

"We have to replumb Yahoo to use a single profile and create feeds, a way to consume feeds and Web services APIs and to layer those mechanisms into the platform," Balogh said.

Yahoo is part of the OpenSocial Foundation, along with Google and MySpace, and will be using the specification as part of the Yahoo application framework (see the slide below). OpenSocial allows applications to work across the major social networks, except Facebook at this point, without modification.

Yahoo's new architecture, called Yahoo Open Strategy proves that the Internet is made of tubes.

(Credit: Yahoo)

Users will have single control panel for assigning where they want the applications to live. Developers will be incented to carry the unified Yahoo user experience with them across other services, although it's not required by the OpenSocial specification, Sample said.

Initially, Yahoo will be vetting applications that touch Yahoo Mail. "We don't want to risk exposing user data," Sample said. "Once they prove themselves we can open up more. We are starting with a toe in the water."

SearchMonkey is the first fruit of Yahoo's new open initiative. It allows developers to alter the presentation of search results, is currently in limited beta and will be in general release within the next several weeks, Balogh said.

Compared to creating a social graph and scaling the back end for 500 million users and 10 billion latent relationships among the Yahoo clan, SearchMonkey is relatively simple feat of openness.

Yahoo has an ambitious and complex task ahead to deliver version 1.0 within this year amidst other distractions, such as Microsoft's courtship of the company. Balogh talks a good game: "The goal is nothing short of creating the best developer environment for creating Internet applications across the Web." Now Yahoo has to show that it can execute.

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Technorati Tags: Yahoo, Web 2.0 Expo 2008