Is this the end of the road for Apple's chip?

WIRED said in its latest article that we have said goodbye to Apple's Lightning cable for a while, and after the company's September launch event, the farewell seems to be even closer. With the release of a large number of devices, Apple has transitioned all of its flagship products to USB-C. However, if you look closely, the proprietary connector we are familiar with is still hidden in some corners of its product line.

The Lightning connector was first released in 2012 with the iPhone 5 as a replacement for another proprietary charger, a bulky and failure-prone 30-pin connector. Not only is Lightning much smaller, leaving more room for other components inside the device (like a larger battery), it also raises the bar for durability. Plus, it's reversible, so it can be inserted no matter which way you insert it. However, proprietary chargers also give Apple control, and they're making a lot of money from this cable.

But how long can it last?

The Lightning connector was first released in 2012 with the iPhone 5 as a replacement for another proprietary charger (a bulky and failure-prone 30-pin connector). Not only is Lightning much smaller, leaving more room for other components inside the device (like a larger battery), it also raises the bar for durability. Plus, it's reversible, so it plugs in either way you want it.

Each Lightning connector has a small Apple chip built into it that regulates the voltage, and while this improves safety, it also enables the company to collect licensing fees from third-party accessory makers to take advantage of the Lightning port through the company's Made for iPhone program. It's easy to see why it would want to stick with the standard for as long as possible.

Let’s go back to September 12, 2012, when Phil Schiller, now Apple’s senior vice president of worldwide marketing, first introduced the Lightning connector and the iPhone 5 to the world.

He began by saying, “iPhone has used the same iPod 30-pin connector that we first introduced in 2003, and it has worked just fine for nearly a decade,” Schiller said on stage. “But a lot has changed since we first invented that 30-pin connector.”

When Schiller introduced the Lightning connector, he claimed that it had several advantages over the 30-pin connector: an all-digital, 8-signal design; an adaptive interface; improved durability; reversible, easier to use, and 80% smaller. In the iPhone 5 press release, Apple also used a short sentence to introduce the new interface: "iPhone 5 features an all-new Lightning connector that is smaller, smarter, and more durable than before. The all-digital Lightning connector has an adaptive interface that uses only the signals each accessory needs and is reversible so you can connect to accessories instantly."

Apple is well aware that changing the type of interface on the iPhone will be opposed, but it has tried to focus on the positive aspects. At the press conference, Schiller explained the change:

“From the beginning, iPhone has used the 30-pin connector from the iPod, which was originally introduced in 2003 and worked fine for nearly a decade. But a lot has changed since we first invented that 30-pin connector.

A lot of things we used to do online, we can now do wirelessly. We now use Bluetooth to connect speakers, headphones, and car systems. We use Wi-Fi… to AirPlay to our TVs or stereos. We can now sync to iTunes over Wi-Fi. And best of all, with iCloud, we can download everything wirelessly and even back it up to the cloud.

A lot of things have changed, and it was time for connectors to evolve. And that’s exactly what we did.

Our new connector is called Lightning. So now we have Thunderbolt and Lightning in our connector strategy. This connector is a modern connector for the next decade. It's a fully digital, eight-signal design. It can accommodate the signals that are needed for the different accessories that you might plug in.

It’s more durable, and it’s easier to use because now you can plug it in either direction. It doesn’t matter. The best part about it for the engineering team is, it’s been great to build a product like this that’s 80 percent smaller than before. That’s a huge improvement for the world’s thinnest smartphone. We’re working with accessory manufacturers to have them integrate Lightning connectors into products you might choose to buy, for example, this holiday season. We have great partners working with us like Bose, JBL, Bowers and Wilkins, Bang and Olufsen, and many more.”

It was this shift that allowed Apple to earn astonishing revenue from a cable in the next decade.

In previous reports, we also mentioned Apple's Made for iPhone (MFi) program, which involves connectors including the original dock connector, Lightning connector, headphone jack, and AirPlay support. Companies that join the MFi program must pass certification testing before they are entitled to display MFi-related logos on their packaging.

The Apple MFI program guarantees that the accessories you purchase have been tested and approved by Apple. Apple charges a 10% fee for products bearing the logo, which the media calls a "tax." Products that use an extended iPod headphone jack or dock connector are available under license.

Along with it comes the Apple MFI (Made for iPhone/iPad) chip, which is a microcontroller or integrated circuit that Apple requires accessory manufacturers to incorporate into their products to ensure compatibility and functionality with Apple devices. These chips are a form of certification and authentication that verifies that the design of the accessory meets Apple's quality, safety and performance standards.

MFI chips are commonly used in Lightning cables, chargers, headphones, and other accessories. They enable safe and efficient charging, data transfer, and audio output, while ensuring that accessories don't damage connected Apple devices. Essentially, the MFI chip acts as a bridge between accessories and Apple devices, ensuring a seamless and secure connection. This certification program is Apple's way of ensuring that users get a consistent and reliable experience across its devices and compatible accessories.

According to information, the MFi (Made for iPhone/iPad/iPod) certification program has a long history and has developed along with Apple's iconic product line. The program was launched at Macworld Expo in 2005 and was originally called "Made for iPod". Its main focus is to certify headphones and cables with control units designed specifically for iPod.

Initially, the MFi fee was rumored to be as high as $10 per device, or 10% of the total retail price of the accessory (whichever is higher). Later it was adjusted to $4 per device. According to Bloomberg, over the past decade, Apple has built a huge Lightning accessory ecosystem worldwide, and the Cupertino giant may earn tens of millions of dollars in revenue from licensing fees every quarter.

It is reported that the commissions and licensing fees Apple earns through the MFi program constitute a large part of Apple's cable-related revenue, totaling as much as $10 billion. It is no wonder that the company has been sticking with this program.

However, in June 2023, the European Union passed legislation supporting USB-C as a universal cable for all personal devices, including phones, tablets, computers, headphones, etc. The government allowed companies to transition to USB-C by the end of 2024. Europe is a huge market for Apple, and the company earned $95 billion in revenue from the continent in fiscal 2022. Therefore, Apple faces a choice: keep $10 billion in cable revenue or keep the approximately $100 billion in revenue from the European market.

That being said, the steady migration to USB-C ports actually began on Apple's own initiative with the launch of the iPad Pro in 2018. The iPad Air followed in 2020, and then the iPad Mini in 2021. Then the iPhone in 2023.

Whether or not Apple truly believes this, the move to USB-C doesn’t seem to be holding Apple back. During its recent hardware event, Apple took the opportunity to move the rest of the AirPods line over to USB-C — eventually updating the AirPods Max to the format and introducing it to the new AirPods 4. So which Lightning products are left?

Aside from older iPhones that are still on sale and the first-generation Apple Pencil, the only current-generation products that have Lightning connectivity are the Magic Keyboard, Magic Mouse, and Magic Trackpad. There’s a good chance these Mac accessories will be updated to USB-C before the end of the year.

There is no doubt that Apple is a well-deserved giant in the field of smartphones and even chips. The company's leading and investment in technology have also made them a target of global attention. Even the idea of ​​making money in Lighting has opened the eyes of many operators.

Although, now it has become a foregone conclusion that they will move towards Type C. After abandoning the Lightning interface, Apple's cash flow will inevitably be affected.

However, there are reports that the company may develop a certification chip specifically for the USB-C interface, which will be used in the iPhone series of mobile phones and related MFI accessories. Therefore, existing Type-C cables may not be recognized by the new iPhone or cannot be charged quickly.

However, we don’t seem to have seen any related reports so far. Do you think this is possible?

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