Apple‘s (NASDAQ: AAPL) custom silicon ambitions in recent years have been nothing short of astounding, as the Mac maker’s capabilities continue to expand. The company now designs more silicon than ever before, notably including bringing GPU development in-house for the first time in the most recent A11 Bionic chip.
It should come as no surprise that there are more custom chips in the pipeline.
Future Apple Watches may include custom silicon. Image source: Apple.
CNBC reports that Apple is now developing a custom chip that would be able to efficiently process health data, citing various public job listings in recent months. The postings, which have since been taken down, show that the company’s Health Sensing hardware division is seeking “sensor [application-specific integrated circuit] architects” that can develop “new sensors and sensing systems.”
Another job listing reveals that Apple is still working on next-generation optical sensors, which are what the company currently uses to measure a user’s heart rate with Apple Watch. Apple also uses motion co-processors in its mobile devices that process data from sensors like the accelerometer and gyroscope, which can be used to count steps.
A fitness enthusiast, CEO Tim Cook has made it an apparent goal for Apple to deliver health and fitness solutions for Apple customers. Bloomberg reported last year that the company was exploring integrating an EKG heart monitor into future versions of Apple Watch.
Investing in the long run
Many tech giants have been jumping on the custom chip bandwagon recently, but Apple is largely credited with catalyzing that broader trend, releasing its first custom A4 nearly a decade ago in 2010. Companies are increasingly appreciating the benefits that custom designs can offer — specialized performance, greater power efficiency, product differentiation, and cost savings at high volumes — if the company can afford to fund the necessary research and development investments.
Speaking of R&D investments, it’s no coincidence that Apple’s R&D spending has hit record levels, setting an all-time high of $3.7 billion last quarter, or 7% of revenue. Developing autonomous driving systems undoubtedly represents a significant chunk of Apple’s R&D spend, but there should be little doubt that its growing portfolio of custom chips accounts for a large portion as well.
However, it sounds like Apple is still fairly early on in its custom health chip road map, in which case it would likely be several years until any such silicon is ready to ship.
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Evan Niu, CFA owns shares of Apple. The Motley Fool owns shares of and recommends Apple. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy.
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