What Apple seeks in Israel

Shmulik Shelach

In many ways, Intel is the model for Apple's plans for an Israeli development center.

Some in Israel's semiconductor industry are living under siege at present. They find themselves between the many people who are trying to extract information from them about Apple's plans in the Israeli market, and the US company itself, which is fanatical about imposing absolute secrecy on anyone who comes into contact with it. Anyone who attempts to communicate with people at Anobit, which is in talks on being acquired by Apple, or with the company's investors, or with people involved in setting up Apple's planned development center in Israel, will find that they are not available on the telephone, and do not respond to e-mail messages.

Apple's decision to set up a semiconductors development center in Israel, revealed by "Globes" yesterday, came as a surprise. Apple is not a company that spreads its development capabilities around. In fact, over the years it has taken care to keep them close to home. Apple also does not look like a company very well suited to exploiting Israel's technological capabilities, which are generally focused on the core technology, and less on consumer products. Despite all that, Apple recently decided to set up its first development center outside the US in Israel, to be managed by high-tech veteran Aharon Aharon.

"I see no great difference between what Apple seeks here, according to the reports, and what other companies seek," says Professor Uri Weiser, a visiting professor at the Electrical Engineering department of the Technion, and a consultant to high-tech companies. "There are many Israeli companies that have an impact on the end user." In his own personal history, Weiser has seen the development of one prominent development center in particular, that of Intel, where he worked until the mid 2000s.

Apple's plans for Israel and what Intel does here invite comparison. Both activities are in semiconductors, and both affect computing devices for the end user. Intel Israel is developing the next generation of processors for portable computing, and Mac computers, both fixed and portable, have in recent years been based on Intel processors. So it is not surprising that the Apple representatives currently visiting Israel, headed by VP Ed Frank, stopped off at Intel's development center in Haifa.

"We saw it at Intel"

There is another connection between Apple and Intel in Israel. Former Intel Israel employee Johny Srouji is now VP of VSLI at Apple, and it may be that he and other Israelis who have reached senior levels of management at the company are responsible for its plan to establish itself here. "In most cases, deep involvement of major international companies in Israel stemmed from Israeli researchers and developers who persuaded the companies to come here," says Weiser, "We saw this at Intel, for example, with Dov Frohman, and at National Semiconductor, with Giora Yaron."

An interesting question is how far Apple's rigid and centralized corporate culture will suit the Israeli environment, where everybody knows everybody. Weiser is sure that there will be no problem: "As far as corporate culture goes, there are quite a few Israeli companies that you don't hear about. When necessary, they know how to keep quiet," he says.

From a strategic point of view, Israel offers Apple much more than Silicon Valley. Israel has become an impressive center of know-how on electronic components, with an emphasis on memory and communications chips. Apple, which needs advanced technological capabilities in order to improve the performance of its communications and computing devices, can find a wealth of knowledge and technologies here in those areas.

Another interesting angle is to do with the forthcoming Apple TV. In Israel, Apple will find a range of technologies for home communications, gesture recognition interfaces, and multimedia processing. This week, talks were reported between Apple and Anobit, but Apple's products already contain technology from Israeli company Ceva Inc. (Nasdaq:CEVA); LSE:CVA).

Published by Globes [online], Israel business news - www.globes-online.com - on December 15, 2011

© Copyright of Globes Publisher Itonut (1983) Ltd. 2011

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