Apple, Inc. Deserves More Credit for Its Chips

Apple's A10 processor powers iPhone 7 and 7 Plus. Image source: Apple.

We all heardabout the lack of a headphone jack in Apple's (NASDAQ: AAPL)newly released iPhone 7. But an understanding of the iPhone 7's new A10 processor, along with some other notable updates to the device, are likely less common.

In this clip fromIndustry Focus: Tech, Motley Fool analyst Dylan Lewis and Fool contributor Evan Niu talk about a few less-publicized changes to the iPhone line that were revealed in this month's unveiling: impressive waterproofing, improved battery life, and significantly faster processors.

A full transcript follows the video.

A secret billion-dollar stock opportunity The world's biggest tech company forgot to show you something, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early in-the-know investors! To be one of them, just click here.

This podcast was recorded on Sept. 16, 2016.

Dylan Lewis: Some of the other big things with this product release,they introduced water resistance. The iPhone 7 and 7 Plus can be submerged under 3 feet of water for 30 minutes. That's the benchmark that they're using there.Apple is not the first company to do this.Samsungprettyheavily promotes theirwater-resistant products. So, just aninteresting thing. I know that they deal with a lot of water-damagedproducts, and I don't believe that water damage will be covered under warranty.

Evan Niu:That's true. Thefunny thing about the waterproofing thing is that last year's iPhonewas actually surprisingly waterproof. There are test videos from last yearof people putting iPhonesinto a bowl of water for literally an hour. They time lapsed it. And it still works. They would check every 30 minutes or so. So,I think they had made a lot of progress last year, but, if you market it, people are going to do it, and if they'redisappointed, you're in a hot spot. So,I think that what they did is start this process last year, didn't tell anyone about itbecause they didn't want to invite people to test it, even though, of course, people tested it anyway,and then now they felt more confidentwith the changes they did this yearwith making it even more sealed. So now, they're touting it as a big thing,but it's actually something I think they started last yearor maybe even the year before that.

Lewis:Yeah,I think that's a feature that's better tosurprise consumers with thanhave them expect it and not quite deliver on it. So,that's something you can look forward to if you were thinking about upgrading. The phones also tout a longer battery life -- I believe it's an extra two hours for the iPhone 7 over the iPhone 6s, and I believe it's an extra one hour over the iPhone 7 Plus over the iPhone 6s Plus.

Niu:I think that's a big achievement,because I think most of that is coming from this A10 fusionprocessor with its greaterefficiency. I can't remember the numbers,but I think the battery is a little bit bigger. But the majority of that gainis probably coming fromefficiency gains on the power side of the processor,because they're finally doing this processor architecture that has the two powerful cores, plus the two little cores, which is similar to somethingARMused to do called big.LITTLE. But, this implementation is not exactly that -- this one is much moresophisticated. But the concept is, you use these low-power coreswhen you have low-power tasks,and you save a ton of energy. I think it's a huge testament to how farApple's chip team has come. It's crazy that they've come this far, and they're nowone of the most sophisticated process makers in the world. And their first proprietary chip was in 2010. So, we're talking about six years. The A4 was the first one, in 2010. And now, they're at this insane level, where they're basically...the iPhone 7 Plus isbasically stronger than a MacBook Air.


Niu:In six years, they've done this. It'sreally mind-blowing. And they don't get much credit. It's weird, because they don't talkabout this very much.

Lewis:Yeah,I think they tend to focus onthe very visiblefeatures and form factor elements of the product. Togive you an idea ofwhat the performance numbers look like from generation to generation, the A10 chip isapproximately 40% faster than the A9, which is what they used to power the 6s. The A10 chip is twice as fast as the A8, which powered the iPhone 6. You'redefinitely getting a pretty good performance boost there. That and the battery life are twoof the really big elements thatyou might not notice right awayjust looking at the product,but once you start really using it, you'll start to feel it.

Dylan Lewis owns shares of Apple. 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 2018 $90 calls on Apple and short January 2018 $95 calls on Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.