In addition to the updates in appearance, the most noteworthy aspect is that the new iPhone Air is equipped with the latest A19 Pro chip, indicating that Apple is once again focusing on the field of artificial intelligence. The custom A19 Pro chip introduced by Apple brings significant architectural changes, incorporating neural accelerators in each graphics processing core to enhance computing power. Apple also launched the wireless chip N1 for the iPhone for the first time, as well as the second-generation iPhone wireless modem C1X. Analysts say this move allows Apple to take control of all core chips in its phones.
In the first U.S. interview regarding these new chips, Tim Millet, Apple's Vice President of Platform Architecture, stated, &#34;When we control the core technology, we can achieve functionalities that cannot be accomplished by purchasing commercial chips.&#34;
So far, although Apple has been producing network chips for AirPods and Apple Watch for nearly a decade, Broadcom (AVGO.US) has been the primary supplier of wireless and Bluetooth chips for Apple's iPhones. Apple's N1 has been applied to the entire iPhone 17 series as well as the iPhone Air.
Arun Mathias, Apple's Vice President of Wireless Software Technology and Ecosystem, shared with the media the improvements of the N1 device in terms of Wi-Fi functionality. Mathias said, &#34;One thing people may not realize is that your wireless network access point actually helps your device determine its location, so you don't need to use GPS at all, as using GPS is more costly in terms of energy consumption. By implementing this functionality more seamlessly in the background without frequently waking up the application processor, we can achieve more efficient processing.&#34;
For the iPhone's modem, Qualcomm (QCOM.US) has been the sole supplier since 2020. This situation changed in February when Apple introduced the C1 modem in the iPhone 16e. This was part of a plan that began as early as 2019 when Apple acquired Intel's modem business for $1 billion. Qualcomm has long warned investors that this change was coming. Qualcomm modems are still retained in the iPhone 17, 17 Pro, and 17 Pro Max, while Apple's C1X is used in the iPhone Air.
Ben Bajarin, CEO of the technology research and consulting firm Creative Strategies, stated, &#34;In terms of overall transmission speed and performance, it may not yet match Qualcomm's products, but they are able to control it and run it at lower power consumption. Therefore, you will get longer battery life.&#34; He expects Apple to completely stop using Qualcomm's chips &#34;in the coming years.&#34;
Mathias stated that the operating speed of C1X is twice that of C1 and is &#34;30% more energy-efficient&#34; than the Qualcomm modem in the iPhone 16 Pro.
After Apple announced this news, Qualcomm and Broadcom did not feel much market impact, and both companies will continue to maintain certain core technology licensing partnerships with Apple.
AI Accelerator of A19 Pro
Under the ongoing pressure from Wall Street regarding Apple's artificial intelligence strategy, Apple has launched three new chips.
Bajarin stated, &#34;They may never have an independent Apple model like Google or OpenAI. However, they will still run these services on the iPhone, right? They want the iPhone to be the best platform for developers to run their AI technologies.&#34;
Since the iPhone 4 was equipped with A-series chips in 2010, Apple has been developing system-on-chip (SoC) technology in-house. The latest generation A19 Pro features a new chip architecture that prioritizes artificial intelligence tasks and includes a neural accelerator in the graphics processing core.
Millet stated, &#34;We are building unique, state-of-the-art device-side AI capabilities. Currently, we are working to ensure that these phones we are about to launch or are delivering can handle all the important device-side AI tasks that will emerge.&#34;
Privacy is a significant reason for Apple's priority in adopting device-side AI technology, but Millet stated there is another reason. He said, &#34;It's efficient for us and very responsive. We are clear that this allows us to have better control over the entire experience.&#34;
One &#34;built-in AI&#34; feature highlighted by Millet is the new front camera, which uses AI technology to recognize new faces and automatically switch to taking landscape photos. Millet stated, &#34;This fully utilizes almost all the capabilities of the A19 Pro.&#34;
Apple's initial AI hardware—its &#34;neural engine&#34;—first debuted back in 2017. However, it was hardly mentioned during the launch event. Instead, the focus was on increasing computational power for the graphics processor.
Millet stated, &#34;The integration of neural processing has brought the performance inside the iPhone to the level of a MacBook Pro. This is a significant advancement in machine learning computation. For example, when you look inside the neural engine, you will find a large number of dense matrix operations. Our previous graphics processors did not have this capability. But now with the A19 Pro, we can do it.&#34;
Bajarin stated that Apple's neural accelerator may work similarly to the tensor cores on NVIDIA's AI chips (such as the H100).
Millet said, &#34;We are integrating neural processing technology in a way that allows programmers to run programs on these small processors, thereby expanding the instruction set, so they can have a whole new type of computer that can use it directly and seamlessly switch between 3D rendering instructions and neural processing instructions, all within the same microprogram
Apple's previous generation A19 system chip is used in the base model of the iPhone 17, while the A19 Pro is used in models such as the iPhone Air, iPhone 17 Pro, and iPhone 17 Pro Max.
After the overheating issues with the iPhone 15, the new heat spreader in the Pro models can cool the custom chips. Kaiann Drance, Apple's Vice President of Global iPhone Product Marketing, stated, &#34;In fact, the layout of the A19 Pro chip is consistent with the layout of the system chip. We consider the overall layout of the entire system, including the forged unibody aluminum design, which has excellent thermal conductivity. Therefore, we can effectively dissipate heat through the evaporative cooling system while considering the chip's position and the overall system layout. Moreover, it is even fixed in place through laser welding, forming a metal connection that also helps with heat dissipation.&#34;
More chips, more American manufacturing
Apple still needs to source some smaller components from other companies, such as memory products from Samsung and analog chips from Texas Instruments. However, according to Bajarin, starting next year, all large core chips used in iPhones will be designed by Apple itself.
Bajarin stated, &#34;We expect Apple computers to be equipped with modems. iPads will also be equipped with modems. Moreover, Apple computers are likely to be equipped with various types of network chips. I believe this technology will be applied to all of Apple's product lines in the coming years.&#34;
When Millet was asked whether a neural accelerator would appear in the GPU core of the M5 (the next-generation expected Mac system chip), he replied, &#34;We have taken a unified approach in architecture design.&#34;
Apple plans to produce at least some custom chips in the United States, with locations such as TSMC's new campus in Arizona being considered. Apple's A19 Pro uses TSMC's most advanced 3-nanometer process technology. Although TSMC plans to achieve 3-nanometer mass production in Arizona by 2028, this goal has not yet been reached.
In August, Trump announced a 100% tariff on chips not manufactured domestically. On the same day, Apple announced it would increase its investment in the U.S. to $600 billion over the next four years. Apple CEO Tim Cook stated that part of this funding would be used to establish a &#34;fully domestic chip supply chain.&#34;
Bajarin stated, &#34;In fact, it is a question that needs to be clarified what the impact of tariffs on the chip industry chain really is. This is why Apple and Tim Cook have taken on the mission to actively call for investment in the U.S.&#34;
As part of this plan, Bajarin stated that if Apple's 14A products can truly deliver on all their promises, Apple may seriously consider helping struggling American chip manufacturer Intel (INTC.US)
However, he added that it will take some time for Intel to become a viable option.
Millet stated, &#34;We are very excited about TSMC's move into U.S. manufacturing. Clearly, from a time zone perspective, this is very helpful for us, and we also believe that supply diversity is indeed very important.&#34;
When asked if he was aware of how much of Apple's $600 billion U.S. investment would be used for custom chips, Millet replied, &#34;I hope that number will be significant.&#34;

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Apple Inc. showcased its strategy in the field of artificial intelligence with the new iPhone Air, equipped with the all-new A19 Pro chip, enhancing computing power. The new chip introduces a neural accelerator, and Apple has launched the wireless chip N1 and the second-generation modem C1X for the first time, marking Apple's control over core technologies. Vice President Tim Millet stated that mastering core technologies enables unique functionalities. The N1 chip has been applied to the iPhone 17 series, enhancing Wi-Fi capabilities and reducing reliance on GPS

- The new iPhone Air features the A19 Pro chip, emphasizing Apple's focus on artificial intelligence with significant architectural changes.  
- Apple has introduced its own wireless chip, N1, and the C1X modem, aiming to control core components in its devices, which analysts believe will enhance performance and battery life.  
- The company plans to increase its investment in U.S. manufacturing, including custom chips, as part of a broader strategy to establish a domestic supply chain amid rising tariffs on non-domestic chips.

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Apple's AI "chip" strategy: openly refining the iPhone, secretly advancing the A19 Pro