Apple's Pentium moment

In the 1990s, as the market shifted from the 80486 processor to the newer Pentium processor, Intel had a problem. On some Pentium processors, a certain mathematical operation was incorrect. It was called the "FDIV bug". What made this a problem was that the error was detected only after a significant number of Pentium processors had been sold inside PCs.

Now that Apple is designing its own processors (not just the M-series for Mac computers but also the A-series for phones and tablets), Apple faces the risk of a similar problem.

It's possible that Apple will have a rather embarrassing problem with one of its processors. The question is: how will Apple handle it?

In my not-so-happy prediction, the problem will be more than an exploit that allows data to be extracted from the protected vault in the processor, or memory to be read across processes. It will be more severe. It will be a problem with the instruction set, much like Intel's FDIV problem.

If we assume that the situation will be roughly the same as the Intel problem, then we will see:

- A new processor (or a set of new processors) from Apple
- These processors will have been released; they will be in at least one product and perhaps more
- The problem will be rare, but repeatable. If one creates a specific sequence, one can see the problem

Apple may be able to correct it with an update. If it is, then Apple's course is easy: an apology and an update. Apple may take some minor damage to its reputation, which will fade over time.

Or maybe the problem cannot be fixed with an update. The error might be "hard-coded" into the chip. Apple now has a few options, all of them bad but some less bad than others.

It can fix the problem, build a new set of processors, and then assemble new products and offer free replacements. Replacing the defective units is expensive for Apple, in the short term. It probably creates the most customer loyalty, which can improve revenue and profits in the longer term.

Apple could build a new set of products and instead of offering free replacements, offer high trade-in values for the older units. Less expensive in the short term, but less loyalty moving forward.

I'm not saying that this will happen. I'm saying that it may happen. I have no connection with Apple (other than as a customer) and no insight into their design process and quality assurance procedures.

Intel, when faced with the FDIV bug, handled it poorly. Yet Intel survives today, so its response was not fatal. Let's see what Apple does.

iPad gets an M4

There is a lot of speculation about Apple's forthcoming announcement. Much of it has to do with new models of the iPad and the use of a new M4 processor. Current models of iPad have M2 processors; Apple has not released an M3 iPad. People have tried to suss out the reason for Apple making such a jump.

Here's my guess: Apple is using the M4 processors because it has to. Or rather, using M3 processors in the new iPads has a cost that Apple doesn't want to pay.

I must say here that I am not employed by Apple, or connected with Apple, or with any of its suppliers. I have no contacts, no inside information. I'm looking at publicly available information and my experience with inventory management (which itself is quite limited).

My guess is based on the process of manufacturing processors. They are made in large batches, the larger the better ('better' as in 'lower unit costs').

Apple has a stock of M3 processors on hand. Possibly some outstanding orders for additional processors.

Apple also has projections for the sales of its various products, and therefore projections for the reduction of its inventory and the allocation of future orders. I'm pretty sure that Apple has gotten good at making these projections. It has projections for MacBooks, iMacs, iPhones, and iPads.

My guess is that Apple has enough M3 processors (on hand or in future orders) for the projected sales of MacBooks and iMacs, and that it does not have enough M3 processors for the sale of MacBooks, iMacs, and iPads.

Apple could increase its orders for M3 processors. But my second guess is that the minimum order quantity is much larger than the projected sales of iPads. (The iPad models have low sales numbers.) Therefore, ordering M3 processors for iPads means ordering a lot of M3 processors. Many more processors than are needed for iPad sales, and probably for the MacBook and iMac line. (The MacBooks and iMacs will switch to M4 processors soon, possibly in September.)

Apple doesn't want to over-order M3 processors and pay for processors that it will never use. Nor does it want to order a small batch, with the higher unit cost.

So instead, Apple puts M4 processors in iPads. The M4 production batches are just starting, and Apple can expect a number of future batches. Diverting a small number of M4 processors to the iPad is the least cost option here.

That's my idea for the reason of M4 processors in iPads. Not because Apple wants to use AI on the iPads, or make the iPad a platform suitable for development, or switch iPads to Mac OS. The decision is not driven by features, but instead by inventory costs.