December 21, 2011, Updated September 11, 2012

Well-founded rumors fly around Apple VP’s recent visit to Israel. Could the consumer giant be preparing to ride the Israel tech bus along with Google, Microsoft and Intel?

Apple iPhone

The iPhone maker may be ready to open its first R&D center outside California.

Better late than never: According to recent reports and rumors — fueled by a visit from a top Apple executive — Apple is planning to open a research and development center in Israel. This would be Apple’s first and only R&D facility outside California.

Apple would be joining dozens of other leading tech companies that have established large development centers in Israel. Google has not one, but two such centers in Israel — the only country in the world outside the United States with that distinction.

Microsoft has some 1,000 Israelis working at several R&D centers, while Intel has developed some its most advanced processors, in whole or part, at is Israeli branches. And other tech giants, including Cisco, Motorola and IBM, have been taking advantage of the “Israeli mind” for decades.

So what would Apple be seeking in Israel that it can’t get in Cupertino? Apple hasn’t publicly commented on the rumors, but observers have noted that Apple has not been a big spender on R&D in the past — dedicating only about two percent of its total annual sales to researching new technology, considered a very small percentage in the tech world.

With the competition ramping up from Google, Amazon, Samsung, Microsoft and others in the software and hardware space, Apple may be taking a preventative step, looking at new technologies while it still dominates in the phone and tablet market. Now that guru Steve Jobs has left the stage, Apple’s leadership may see research as its ticket to future products, as opposed to the inspiration Jobs supplied when he imagined and created devices like the iPod and the iPhone.

Apple to take a bite of Anobit?

Another explanation surrounds an announcement that emerged just a day before the rumors about the R&D center began swirling: Apple is said to be in talks with Israeli flash memory developer Anobit, which makes chips for Apple’s iPhone, iPad and MacBook Air, as well as for Samsung devices. According to those reports, Apple is prepared to offer as much as $500 million for Anobit- which would place the company at the upper end of the bidding history for Israeli startups by US firms.

As with other companies Apple has acquired, Anobit would then sell its products exclusively to Apple – thus denying Samsung and others Anobit’s lower-cost and better-performing flash controllers that are at the heart of today’s data storage systems.

The competition between Apple and its competitors for patents, in an attempt to lock out others from the best ideas, has never been greater. Just a few months ago, Apple and Microsoft beat out Google for thousands of patents from bankrupt Nortel Networks – spending a whopping $4.5 billion, besting a $3.1 billion bid from Google. At $500 million, Anobit’s patents could turn out to be a bargain for Apple and give it the edge it needs to come out with the next generation of smartphones and devices.

Anobit’s 200 employees could theoretically form the core of Apple’s Israel R&D center.

Apple exec’s hush-hush Israel meetings

While all of this is still just well-informed conjecture, a recent visit by Apple corporate vice president for R&D Ed Frank is a fact. Frank, who once worked in Broadcom, a major multinational with Israeli roots, reportedly met quietly with numerous Israeli tech companies, both startups and veterans.

He was said to have discussed the establishment of the R&D center and a candidate to run it: Aharon Aharon, chairman of the board of Netanya-based Camero, which specializes in radio frequency (RF)-based imaging systems, and whose through-wall imaging systems have become the choice of military and law enforcement agencies worldwide.

Aharon is a veteran of IBM and also ran the Israel design center for Zoran (now CSR). According to sources, he will be traveling to Apple HQ in Cupertino to get a full-depth education about how Apple does things.

Regardless of the specifics, it’s pretty clear that Apple has finally realized what many other tech companies found out long ago – that Israel is a font of high-tech wisdom, and it’s the smart company that imbibes from that font.

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Jason Harris

Jason Harris

Executive Director