Apple

Apple To Give Intel Chips The Boot In 2020

Sources are saying that Apple could begin using its own chips in Mac computers as early as 2020, which would mean cutting ties with current chipmaker Intel.

According to Bloomberg, the initiative, code named Kalamata, is still in the early stages, but has been approved by executives.

The project is part of a larger plan to make all of Apple’s devices work more similarly and seamlessly together. Replacing the chips would probably result in a multi-step transition.

Apple has used Intel chips in its computers since 2005, and if this change happens, it would be a blow to the computer chipmaker. Apple provides Intel with about 5 percent of its annual revenue, and after the news broke on Monday, Intel shares closed down 6.1 percent at $48.92.

Both Apple and Intel declined to comment on the story, but Stifel analyst Kevin Cassidy said in a note he believed the market was “overreacting” to the report. “We do not expect any other PC manufacturers will consider designing their own CPUs,” he wrote, according to Reuters.

In addition, other analysts said that even if Apple did proceed with its plans, the company would likely phase Intel’s chips out over time.

“While it’s possible that Apple may replace Intel in some of its lower-end product lines, we think it will be difficult for Apple to completely replace Intel by 2020, especially on its higher-end offerings,” said Summit Insights group analyst Kinngai Chan.

The change would allow Apple to bring new features to all of its products more quickly — not to mention it would set itself apart from its rivals. In fact, Apple would then be the only major computer maker to use its own processors, since Dell Technologies, HP, Lenovo Group, and ASUS Computers all use Intel chips.

“We think that Apple is looking at ways to further integrate their hardware and software platforms, and they’ve clearly made some moves in this space, trying to integrate iOS and macOS,” said Shannon Cross, an analyst at Cross Research. “It makes sense that they’re going in this direction. If you look at incremental R&D spend, it’s gone into ways to try to vertically integrate their components so they can add more functionality for competitive differentiation.”

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