Chris Alexander
2nd March, 2011
One thing struck me, other than the inexplicable absence of a “retina” display in the new iPad model, about Apple’s announcement today. Why did Apple not build HDMI into the iPad 2?
It’s not for the lack of space. The iPad 2 is 8.8mm thick (reference), and a female HDMI A port (that it would require) is only 4.55mm high (reference), still giving Apple just over 4mm to play around with and move the port up and down.
However, something else comes into play: money.
The HDMI standard is marshalled by HDMI Licensing LLC. on behalf of the patent owners from companies such as Sony and Toshiba. This works in much the same way as MPEG LA does for the H.264 video codec – everyone pays money to the licensing company, who then dishes it out between the various rights holders.
HDMI requires two licenses in order to be included in devices. The first is an annual fee and you have a choice: either $10,000 straight up (irrespective of number of devices sold), or $5,000 + $1 per device sold. Apple will undoubtedly have the first of these.
In addition to this, you must pay a royalty fee per device that you sell. This fee is a flat rate of 15 cents per device sold; it can be reduced to 5 cents per device if you include HDMI branding in your marketing and product packaging, and a further reduction to 4 cents if you implement the HDMI anti-piracy standard too (Reference for all HDMI costs).
I can’t see Apple doing either of these things (let’s face it, their adapter is called the “Apple Digital AV Adapter” – no mention of HDMI until 2 paragraphs into the description), so let’s assume they’re paying the full 15 cents whack.
The reason Apple haven’t built HDMI into the iPad, and caused everyone a load of hassle with yet another adapter they can lose and that looks stupid, is simple: money.
If you sell 15 million units in 9 months, that equates to over $2,250,000 dollars – yes two and a quarter million – in royalty payments over a single connector. Alternatively, you could sell it as an add-on. Let’s assume 10% of iPad owners will also own the connector – that reduces the royalty payment to a paltry $225,000, which can easily be absorbed in the gigantic markup they make by charging $39 for 2 inches of cable.
So there you have it – so far as I can tell, there is no other real explaination.
Some footnotes that may be of interest: