Lying down to make money from chip business, is Apple going to lose out?

According to the normal rhythm, Apple's Apple 15 series will be officially unveiled at the annual technology spring festival - the autumn release conference in September. Familiar Cook will say hello to everyone in the early morning.

When it comes to the biggest upgrade of this generation, some people may think of the narrowed border, the A16 using TSMC's 3nm process, or the rumored new custom key. Even if it is a small change in details in the annual Apple new machine exposure, it will also cause a wave of discussion.

Among all the upgrades and changes, the most anticipated one is that Apple has abandoned the Lightning interface and unified it to the USB-C interface. Consumers no longer need to buy expensive Apple-specific Lightning to USB-C data cables. Today, with cheap and good-quality dual-port USB-C cables everywhere, "one head and one line go all over the world" is no longer a dream.

Do you think Apple has finally come to its senses after many years?

Not really, it was just on October 24th last year that the European Council finally passed a brand new charging specification, legislating that the USB-C interface will become a universal interface for a series of electronic devices such as mobile phones, tablets, and headphones. From December 28, 2024, these electronic products sold in EU member states must be replaced with USB-C interfaces. As long as Apple wants to sell mobile phones in Europe, it has to reluctantly accept this new regulation.

Thinking about it carefully, from Apple 5 in 2012 to Apple 14 in 2022, the price of Apple has risen from five or six thousand to 13,000 yuan in these ten years. Apple's stock price has also climbed from $25 to more than $170, and even Apple's headquarters has moved to Apple Park. The only thing that hasn't changed is this Lightning interface.

FireWire: Born Great, Died of Greed

Since its birth, Apple seems to be bound with words such as rebellious, independent, and unique.

Most personal computers have fans for heat dissipation, but Apple doesn't. Apple II and Macintosh are both fanless designs.

In the 1980s, most people used two or three-button mice, but Apple didn't. They designed a single-button mouse and a brand new operating logic.

Intel x86 processors have strong performance and excellent compatibility, but Apple doesn't use them. They worked with Motorola and IBM to develop the PowerPC processor.

In the last century, Apple was like a rock youth with pockets, with a rebellious mentality and a strong sense of rebellion. It just wanted to go against the world. It had no standards in its eyes and everything was based on itself.

And the FireWire interface was born in such a background.

In 1986, when personal computers were still using SCSI (Small Computer System Interface), Apple engineers conceived a future-oriented interface. In the following years, they worked with IEEE (Institute of Electrical and Electronics Engineers) to jointly develop this interface standard. It was officially completed in 1995 and was named the IEEE 1394 standard. Apple also registered the FireWire trademark specifically for this standard, demonstrating its difference from all previous interfaces. FireWire has obvious advantages. First, it has a wide range of functions, providing plug-and-play and hot-swappable capabilities, supporting audio and video transmission, and can connect up to 63 peripheral devices through a daisy chain. Second, it has a high speed, with a maximum transfer rate of 393.2 Mbit/s (nominal 400 Mbit/s), which is why the first generation interface is called FireWire 400.

There is no harm in comparison. At this time, the USB standard, which is dominated by large manufacturers such as IBM, Intel, Compaq, and Microsoft, has just been released. However, the USB 1.0 in 1996 only has two speeds of 1.5 Mbit/s and 12 Mbit/s, which cannot even reach the speed of FireWire. Even today, there are still many devices whose USB interfaces cannot reach the nominal speed of FireWire, which shows its forward-looking nature.

In order to achieve the ultimate goal, Apple engineers not only invented an isochronous transmission method to meet the needs of audio and video, but also learned from STMicroelectronics at that time, using their patented clock mechanism to double the cable bandwidth. They even drew inspiration from Nintendo's Game Boy and put fragile elastic components on the line material to ensure the durability of the device interface... After 8 years of development, FireWire was finally released as a new standard, but it immediately stunned the entire PC market.

In 1999, the new iMac G3 was released, equipped with two FireWire interfaces. It finally became a standard configuration in the Mac ecosystem. Even before this, a group of Japanese manufacturers led by Sony had already extended an olive branch, hoping to develop this interface with Apple, form a patent pool, and popularize this interface in future audio and video devices. Even Microsoft and Intel, who formulated the USB standard, were interested in cooperating with Apple.

Professional audio and video editors began to discuss FireWire, PC manufacturers began to consider installing FireWire, hard drive manufacturers prepared to transition from SCSI to FireWire, and many people proposed to use this advanced interface for all devices such as cars, aerospace, home networks, digital TV, etc. Without accident, FireWire will appear in almost all new computers in a few years, replacing USB as a better universal interface. Apple even won the prime time Emmy Award because of this interface.

However, at this time, Apple was at a loss due to its poor financial situation. Apple, as the company's helmsman, had the idea of ​​FireWire after hearing about IBM's annual hundreds of millions of dollars in patent income: since Apple had previously spent a lot of effort to develop technology and formulate standards, it is reasonable for Apple to charge a small patent fee to manufacturers who use the standard when Apple is in trouble. It should be noted that before being taken seriously, Apple took a laissez-faire attitude towards FireWire. After all, in the mid-1990s, Apple was in chaos internally and it was difficult to develop and utilize this standard. In the agreement signed with Microsoft, it only charged a symbolic one-time fixed fee of $50. Through this agreement, Microsoft could use the FireWire standard indefinitely. For the consumer electronics industry, with such a low entry threshold and technological advantages, there is no reason not to use it.

This is also the reason why Intel is willing to support Apple's dominance of this standard. At the end of the 1990s, Intel once considered integrating support for FireWire interfaces on chips and motherboards to promote the popularity of this standard in the PC market.

But Apple directly overturned the previous agreement with Microsoft and adopted a new licensing policy: a patent fee of $1 for a single interface, and $2 for two interfaces. Converted at today's exchange rate, it is about $2. If calculated at $2 per unit, millions of PCs equipped with FireWire can bring Apple hundreds of millions of dollars in revenue without any effort, which can solve the company's urgent needs.

When Apple's genius idea reached the ears of Intel's top management, they couldn't sit still and began to communicate with Apple. After all, any large technology company would not accept suddenly paying a large amount of fees every year.

The specific content of the meeting between Intel CTO and Apple is unknown, but the result is clear: Intel directly gave up the plan to integrate FireWire and turned back to vigorously support the USB standard.

A month later, Apple realized that the decision to charge $1 for a single interface was absurd and withdrew it, changing it to a fee of 25 cents per user, which would be allocated to FireWire patent holders. But it was too late. Intel never cared about FireWire again. If you want the high speed of FireWire, let the manufacturers add chips themselves.

The problem is, if Intel chooses to integrate, device manufacturers don't mind compatibility, but additional licensing costs will discourage many manufacturers, not to mention that FireWire itself requires a separate controller chip, which is another expensive cost. No one wants to be Apple's scapegoat. FireWire, which was once a darling of the times, became an object of disdain for manufacturers overnight.

In such an embarrassing situation, even if Apple joined forces with Sony to vigorously promote it in the early 21st century, from Mac to iPod, from cameras to cameras, many popular devices were equipped with FireWire interfaces, and even subsequently launched a higher-speed FireWire 800 interface (786.432 Mbit/s), but this still could not reverse the decline. With the release of the USB 2.0 (480 Mbit/s) and USB 3.0 (5 Gbit/s) standards with higher speed and better functionality, FireWire gradually became marginalized. In 2008, when the new MacBook Pro was released, people were surprised to find that the FireWire interface, which Apple had insisted on for more than ten years, had disappeared and been replaced by the plain and ordinary USB 2.0 interface. When asked why, Apple simply replied with a blank expression, "In fact, all new high-definition cameras in recent years have been equipped with USB 2.0."

Apple's greed ultimately buried a leading interface ahead of its time.

Made For iPod: Taxation Again

The setback of the FireWire interface did not stop Apple's development of interfaces.

In April 2003, the third-generation iPod was released. In order to make the body thinner and more portable, Apple did not continue to use the FireWire interface that had been used in the previous two generations, but instead used the 30-pin interface. On this brand new slender interface, 30 contact points were densely arranged, each responsible for audio, video, ground, power and other functions, in order to meet the constantly developing multimedia needs at that time.

The iPod was born because of the miniaturization of mechanical hard drives. Compared with mobile phones of the same period, the iPod could easily hold hundreds or even thousands of songs and quickly import them through iTunes. This made it quickly popular all over the world. Men, women, and children were all attracted by this small white box called the iPod, and the 30-pin interface quickly became popular. At that time, a large number of cars and speakers followed this trend and added 30-pin connectors or bases specifically for the iPod.

This also allowed Apple to see a huge business opportunity. On January 11, 2005, Apple announced the "Made for iPod" accessory certification plan in the keynote speech of the Macworld Expo. He said that the plan would help consumers choose accessories suitable for the iPod, and provide development guidelines and technical specifications for iPod accessory manufacturers who joined the plan.

In fact, "Made for iPod" covers a large number of accessories related to the iPod, including but not limited to charging cables, wired headphones, charging docks, car connection cables, etc. Only companies certified by Apple can print "Made for iPod" on the packaging to ensure perfect compatibility with the latest iPod.

I believe everyone can see here that this is just a replay of Apple's licensing fee incident on FireWire years ago. The so-called "Made for iPod" is just Apple's desire to get a share of the gradually expanding iPod accessory market.

According to CNET's report, Apple will charge a fee to accessory manufacturers who join the "Made for iPod" program. Insiders revealed that the specific fee is 10% of the wholesale price, essentially a hefty accessory tax paid to Apple. Assuming that the annual wholesale sales of iPod accessories covered by the program are $250 million, Apple can easily earn up to $25 million in profits per year. Due to the fact that 30 Pin is Apple's proprietary interface, often only accessory manufacturers certified as "Made for iPod" can support Apple's Accessory Protocol (AAP) on the dock connector to achieve remote control, volume adjustment, song switching, audio recording and other functions. Manufacturers must obtain chip components through approved suppliers, and the additional cost will naturally be passed on to consumers. Consumers have to pinch their noses and spend more money on accessories for their beloved iPod for a certain function.

In 2007, with Apple's launch, the "Made for iPod" program naturally expanded to Apple, becoming "Made for iPod and Made for Apple". With the release of the iPad in 2010, this program became "Made for iPod, Apple and iPad", and finally unified into the current MFi program.

Three devices, three fields, the same hot sales, Apple regards the accessory market as its own cash cow.

Lightning: Making money because of backwardness

As Apple's proprietary interface, the design of 30 Pin is actually quite advanced. In 2003, the confusing interfaces of mobile phones and other portable electronic products made people confused. 30 Pin shoulders multiple responsibilities. While users of other brands are still carrying a bunch of cables when going out, Apple users have a trend of going global. Music, video, and data transmission can all be done through 30 Pin. Although there are certification standards and hardware restrictions for the MFi program, with the technological progress of other manufacturers, even non-certified accessories can still be used normally. The "Made for iPod" program that Apple has spent a lot of effort on has a trend of gradually disintegrating.

At this time, Apple has already become dissatisfied with the old interface. Apple and iPad, which have sold hundreds of millions of units worldwide, really need an interface that is more advanced, more suitable for smartphones, and more convenient for standardizing the accessory market than 30 Pin. Of course, it also needs to be more convenient for Apple to collect protection fees.

The Lightning interface came into being. Compared with 30 Pin, its contacts were reduced to 8, so its volume was greatly reduced. At the same time, because there are the same contacts on both sides, it can achieve blind insertion in both directions. Compared with Micro USB, which was commonly used by Android at that time, Lightning still has significant advantages.

However, this Apple interface is not as advanced as FireWire more than a decade ago. Although Apple claims that Lightning has improved in speed and reliability, it is still based on the USB 2.0 standard. At this time, the USB 3.0 standard has been released for several years. Shortly after the first batch of Apple devices with Lightning interfaces were launched, Samsung launched the flagship Galaxy Note 3, which became the first smartphone to be equipped with USB 3.0, with a theoretical speed of 5 Gbit/s, far exceeding Apple 5's 480 Mbit/s. So, does Lightning not support USB 3.0 at all? The answer is no. In 2015, Apple adopted a female connector with a total of 16 contacts on the iPad Pro interface, giving USB 3.0 the possibility from a physical level. However, only the official card reader can use the USB 3.0 transfer rate. Apple has not even released a Lightning to USB 3.0 data cable, and Apple users can only endure speeds of 20-30mb/s.

What's even more fatal is that due to the limited number of contacts, Lightning also eliminates the possibility of higher power charging at the physical level. While Android users are charging at high power, Apple is still promoting the 18W charging that supports PD.

At the 2012 Apple 5 conference, Phil Schiller, the former marketing director of Apple, confidently claimed that Lightning was an interface for the next ten years, and also made a bunch of "unique" technical points, such as the increasingly popular NFC is equivalent to Apple's Passbook, Nokia's wireless charging is almost useless except for confusing consumers, and so on.

Reality always comes quickly. In 2014, the more advanced USB-C interface appeared, which was aimed at the next ten years but became outdated in the third year. In the same year, Apple 6 became the first model of Apple to support NFC function. In 2017, Apple 8 series and Apple X began to support wireless charging...

Of course, Phil Schiller eventually fulfilled his promise. The Lightning interface did pass its tenth birthday last September, although it has been outdated for six or seven years.

What makes Apple so keen to create new interfaces like Lightning, and what makes Apple stick to it even when it knows it is outdated?

The answer is nothing but profit. According to analyst Guo Mingchi's analysis in 2012, the cost of the 30-pin interface was 0.4 US dollars, and the cost of the new Lightning interface was 3.5 US dollars, an increase of 775%. At the same time, the average selling price of the Lightning data cable also reached 6 US dollars, an increase of 233% compared to the 1.8 US dollars of the 30-pin data cable.

Although the Lightning data cable has the same white plastic shell, the plug has an inconspicuous chip. According to ChipWorks' disassembly, Apple embedded a chip numbered BQ2025 at the public end. Its manufacturer comes from the famous Texas Instruments. In addition to checking data transmission errors, it also has the function of verifying connections.

Under this BQ2025 chip, there are 5000 logic gates, 128-bit storage capacity, integrated drive transistors, analog circuits, and a large number of capacitors. The complexity far exceeds the imagination of ordinary people, which is one of the reasons why the cost of the new Lightning interface has skyrocketed. When the user plugs in the data cable, the chip will complete the communication process with Apple in a few milliseconds, which is called the password. Once the password is found to be incorrect, the circuit connection will be quickly cut off, and Apple will pop up a window that makes the user cry: Please use the official certified data cable for connection.

So how can this chip from DeYi be added to the data cable?

This is not simply a matter of buying from Apple or DeYi. The accessory manufacturer first needs to prepare materials, apply to Apple, and then accept the review. Apple will also conduct on-site inspections of factories, among which the process is no different from crossing a single-plank bridge with thousands of troops and horses. A large number of manufacturers are screened out, and only about 5% of lucky ones can pass the MFi certification and obtain the qualification to purchase chips. Its selling price is about 2-3 US dollars, and it is not allowed to resell or misuse chips.

However, where there is profit, there are people who take risks. Hackers quickly discovered the vulnerability of the Lightning interface at that time, and produced pirated Lightning data cables by simulating verification functions with other chips through vulnerabilities. Since Apple will continuously block vulnerabilities in iOS system upgrades, hackers will continue to explore new vulnerabilities. As the saying goes, the higher the road, the higher the devil. Apple continues to repair, and cottage manufacturers continue to explore, becoming a unique landscape.

Apple's means are becoming more and more clever and tough. After the release of the Apple 8 that first supports PD fast charging, Apple replaced the Lightning to USB-C cable with a brand-new C94 interface, which is equipped with a brand-new chip and uses SHA256 algorithm encryption. The cracking difficulty suddenly increased, and the past cracking methods all failed. For a while, cottage manufacturers were everywhere, and they could only watch the money slip away from their hands.

Hackers' countermeasures also came quickly, and they cracked the C94 interface in a short time, and Apple was caught in a tug-of-war with cottage manufacturers...

After Apple 8, MFi certification means higher costs. The purchase price of the C94 chip plus tariffs, logistics, and processing can ultimately cost 20 or 30 yuan. Apple may also impose a 20-25% tax on accessories. A C to L data cable with a selling price of sixty or seventy yuan is often taken away by Apple for more than half, so although there are endless cottage lines, Apple still earns a lot of money.

Apple sits firmly in the walled garden, holding the certified chip in its left hand and the iOS system in its right hand, opening and closing its mouth, and earning billions of dollars in revenue every year.

USB-C: Good days are gone

There are many reasons why Apple does not want to give up the Lightning interface and switch to USB-C, but there is only one core reason from beginning to end, which is not profitable enough.

Just like it is unwilling to open the application side-loading function of the App Store, once it switches to the USB-C interface, the monopoly market welcomes openness, which means that Apple no longer has absolute discourse power. After users rush out of the walled garden, will they really turn back with some reluctance? For example, nowadays, almost all domestic applications have built-in youth mode. The original intention of this move is to protect minors from the content they are exposed to and to separate them from the mixed-up internet. However, once they become adults and have mature critical thinking, will they continue to stay in the youth mode?

What Apple fears is not the lack of money-making opportunities like MFi in the future. As Lovecraft wrote in "Supernatural Horror in Literature" in 1927, "The oldest and strongest emotion of mankind is fear; the oldest and strongest kind of fear is fear of the unknown...". Apple's fear comes from the uncontrollable unknown future.

Therefore, even after switching to USB-C, Apple still wants to establish its own set of standards. According to leaks, Apple has specially designed an IC chip for Lightning&Type-C interfaces, which will be used in this year's new Apple and MFI certified products. Foxconn has already mass-produced MFI certified accessories such as EarPods and USB-C data cables for this year's Apple 15 series.

Analyst Guo Mingchi also said that Apple will "optimize" the fast charging performance of Apple 15's MFi certified charger. At this time point of changing the interface, Apple has put its intention to impose new taxes on the table.

In response to this rumor, the EU, the vanguard of anti-monopoly, quickly made a statement. EU Commissioner Thierry Breton wrote to Apple, warning the company not to restrict the functionality of USB-C cables, otherwise it will prevent Apple from selling in the EU after the law takes effect.

At this point, there are only two choices for Apple: either comply with the regulations and give up the restrictions on Apple interfaces, or withdraw from the EU market, including France, Germany, and Spain.

Looking back, what have Apple's proprietary interfaces and MFi plans brought to this market in the past 20 years: the 30-pin interface swept the world, with countless accessories tailored for it, and then became obsolete overnight; the Lightning interface is expensive, and Apple's official data cable is a consumable product that is prone to aging, falling off, and breaking repeatedly; the C94 data cable is one of the most expensive fast charging cables, but it brings the lowest charging power and the slowest charging speed for high-end phones...

Apple's so-called environmental protection reasons cannot withstand any scrutiny in the face of these facts. From the invention of FireWire to the imminent exit of Lightning, Apple has only been doing three things repeatedly in the past 20 years in terms of interfaces: eliminating old interfaces, developing new standards, and then collecting taxes.

In this way, the EU's regulations have broken through layer after layer of barriers, and Apple's good days on interfaces have finally come to an end. How can consumers not applaud and cheer for the many superior aspects of USB-C?