Apple may move into chips to control more of its fate

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Apple (AAPL) may get into the chip design business to gain more control over the development of its products. Currently, that work is done by outside companies. It has meant that the timing and accuracy of designs have not been entirely in the control of the PC and consumer electronics firm. And, like any company in America, Apple likes to control as much of its business and its products as it possibly can.

According toThe Wall Street Journal, "Apple could use the internally developed chips to sharply reduce the power consumption of its hit iPhone and iPod touch devices, and possibly add graphics circuitry to help its hardware play realistic game software and high-definition videos." The move may also allow Apple to keep its product development plans more secret than they already are.

The decision has a significant risk. There is no guarantee that Apple can improve chip function any better than outside experts can. Power consumption is one of the key development goals of any semiconductor firm, so the best minds in that industry are already focused on it.

Apple will probably find that it cannot match its prowess in product design and marketing when it comes to the complex details of chip design. But the company is arrogant and it will have to learn any lessons about expanding into new and somewhat unfamiliar businesses the hard way.

Douglas A. McIntyre is an editor at 24/7 Wall St.

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