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The One Thing Hidden in iPhones That’s Freaking Out the Competition

In public, Apple’s rivals in the smartphone market have tried to downplay the technological advances Apple introduced in the iPhone 5s. But it turns out that one breakthrough — Apple’s speedy, 64-bit A7 microprocessor — has set off a panic inside its competitors. At chipmaker Qualcomm, which provides microprocessors for many of the Android phones that compete against the iPhone, executives have been trying to put on a brave face to the world, but internally people are freaking out, according to an insider at the company.

“The 64-bit Apple chip hit us in the gut,” says the Qualcomm employee. “Not just us, but everyone, really. We were slack-jawed, and stunned, and unprepared. It’s not that big a performance difference right now, since most current software won’t benefit. But in Spinal Tap terms it’s like, 32 more, and now everyone wants it.”

A 64-bit processor handles data in bigger chunks than 32-bit processors, so it can get jobs done faster. PCs have had 64-bit chips for a while, but until Apple introduced the iPhone 5s in September, nobody had put one in a smartphone.

At the time Qualcomm CMO Anand Chandrasekher called the chip “a marketing gimmick,” though Qualcomm quickly put out a statement in which it walked back Chandrasekher’s comment and called it “inaccurate.” Soon after that, Chandrasekher was reassigned. Whoops.

In fact, Qualcomm and others now are racing to finish their own 64-bit chips. But Apple has gained a substantial jump on them. Qualcomm faces an additional challenge, which is that while Apple designs only one new chip a year, Qualcomm must create multiple designs with little tweaks and alterations to meet the needs of each different phone-maker.

Worse yet, San Diego, Calif.-based Qualcomm has been cutting costs and laying off workers, and is about to undergo a big transition at the top, announcing that CEO Paul Jacobs would step into an executive chairman role as COO Steve Mollenkopf becomes the new CEO.

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