Iphone 5 has Thunderbolt, locks users in

How to use a monopoly to jack up prices

Apple LogoSomething about the iPhone 5 and its Mini-Displayport jack just hit the wires, it isn’t a Displayport jack at all, it is a Thunderbolt port. This may sound good, but it is nothing more than a vicious attempt at lock in and price extortion.

Short story, the technology formerly known as Light Peak before Intel removed the Light, (NASDAQ:INTC) now called Thunderbolt uses a Mini-Displayport jack as well. The prototype I saw at CES had a Mini-Displayport jack on it, but at the time, I didn’t realize that the not-standard interface would co-opt the port for Light-free Peak. 2 + 2 = 4.

To make matters more interesting, there are two form factors for ‘Peak chips, normal and small footprint, but Intel won’t put that in the specs anywhere. The ASIC doesn’t differ at all, it is just in a much smaller package. For a laptop, the bigger-but-still-small package is more than small enough, the smaller one just adds expensive mounting procedures and likely causes assembly yield loss. There is no reason for it, unless you were going to put it in a severely space restricted board, say a phone sized machine.

Most people will scoff at this, mainly because they don’t get how ‘Peak works. That is because Intel has changed course, and is set on mushrooming the press, no real technical details will be revealed any more. It is like pulling teeth to get information out of Intel now, and that is by design. (Not Light anymore) ‘Peak is not documented, no one was briefed on it, and mystery abounds.

The short story on how it works is that it is a funnel, it takes up to four PCIe2 lanes and 2 DP 1.1 lanes in one side, and puts out a ‘Peak formatted signal on the other. The other end does the reverse. As long as you have a PCIe lane, and most ARM chips have that as an option, you can slap a ‘Peak chip in there. Speeds might not live up to that implied by the ‘bolt’ part of Thunderbolt, but technically, it is more than possible.

On the up side, things will transfer and sync much faster than they would with USB2, but at a much higher power cost. Most of the time, the iDevice will be plugged in to a PC or power source when transferring data, so that is not a big deal. In fact, TB, Thunderbolt, not Tuberculosis, feeds many more watts than USB3 over the cable, so it should charge much faster than the current docks as well.

Not a bad deal as far as tech goes, but other than charging slightly faster, it is nothing USB3 could not do. The transfers will be limited by the speed of the flash chips, and USB3 would be more than fast enough to saturate that, and would likely do it with much lower power use, with much higher compatibility, and for about 1/10th the silicon cost. USB3 is also backwards compatible, TB is not, and neither is Tuberculosis.

So, why would Apple (NASDAQ:APPL) use vastly more expensive parts that do exactly what USB3 does, cost more, is much harder to design in, limits supplier choices, and isn’t compatible with 99.9% of the devices out there? Easy, to lock you in.

There is one supplier of TB chips, Intel. There are not going to be any others. Apple has special status with Intel on this, exclusivity for now, with Sony and Lenovo coming in later, then anyone else deemed appropriate sometime later. Thunderbolt is not a standard, it is 100% proprietary, and is the ultimate lock in. If you want to make an iSomething compatible device, there is only one company that can make the chips, Intel. If Apple says no, how many do you think Intel will sell you?

This opens the door to Apple and Intel excluding anyone they want from the ecosystem, and jacking up prices for anyone who wants a shiny iThingy. Apple, with their special status is likely exempt, but do you think they will lose sleep if Intel prices chips so that non-Apple devices cost notably more than the Apple ones? Intel is likely counting on the fact that mobo and laptop makers will pay anything asked in order to not be excluded from fruity devices. It is monopoly practices at their best, or worst, depending on which stock you own.

For the consumers, it is a lose/lose though. For buyers, there is no up side for having Thunderbolt in the next iPhone, it is just more expensive with less options, and a vastly curtailed ecosystem as well. Capitalism and competition be damned, this is about profit margins, and that is exactly what Apple and Intel want. That is why you will get Thunderbolt, not USB3 or Mini-Displayport on the iPhone 5, and you will pay dearly for it.S|A

Editor’s note: sticky meanness updated with proper spelling.

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Charlie Demerjian

Roving engine of chaos and snide remarks at SemiAccurate
Charlie Demerjian is the founder of Stone Arch Networking Services and SemiAccurate.com. SemiAccurate.com is a technology news site; addressing hardware design, software selection, customization, securing and maintenance, with over one million views per month. He is a technologist and analyst specializing in semiconductors, system and network architecture. As head writer of SemiAccurate.com, he regularly advises writers, analysts, and industry executives on technical matters and long lead industry trends. Charlie is also available through Guidepoint and Mosaic. FullyAccurate