It’s finally going to happen. Apple Inc. is on the verge of using its own chips over Intel Corp.’s for its Mac computers.
Bloomberg News reported Tuesday that Apple is preparing to announce as soon as this month that it will use its own processors in Macs starting next year. The new Macs will incorporate the same internally-developed semiconductors, based on Arm Ltd. chip-architecture technology, that powers the iPhone. According to Bloomberg’s Mark Gurman, Apple plans to move its entire Mac product lineup to its own chips because of their higher performance and improved power efficiency.
The move will have multiple negative ramifications for Intel’s chip business. The most obvious is the direct impact of losing revenue as the sole processor supplier for Apple’s PC line. The Mac currently represents 12% of the U.S. PC market based on units sold, according to the latest Gartner data. And Bernstein estimates Apple’s laptop line accounts for 2% to 4% of Intel’s sales and mid- to high-single digit percentage of its earnings. Apple also will be able to leverage Taiwan Semiconductor Manufacturing Company Ltd.’s better chip-making technology going forward. Apple uses the Taiwan-based foundry to manufacture its chip designs. In recent years, TSMC has moved ahead of Intel in its ability to fabricate chips at smaller, more advanced chip nodes. At first blush, the financial losses for Intel seem manageable. However, there are second-order effects that may prove more worrisome. First, if Apple is able to make better-performing and more power-efficient chips — an ability it has proven capable of in the smartphone market — then Arm-based Macs may be able to gain a larger share of the PC market on the back of its differentiated features. Further out, Apple’s move may pose a serious threat to Intel’s crown jewel server chip business. Here’s how.