It\u2019s finally going to happen. Apple Inc. is on the verge of\u00a0using\u00a0its own chips over Intel Corp.\u2019s for its\u00a0Mac computers.<\/p>\n
Bloomberg News\u00a0reported Tuesday\u00a0that Apple is preparing to announce as soon as this month that it will use its own processors in Macs\u00a0starting next year. The new Macs will incorporate the\u00a0same internally-developed semiconductors, based on\u00a0Arm Ltd. chip-architecture technology,\u00a0that powers the iPhone. According to Bloomberg\u2019s Mark Gurman, Apple plans to move its entire Mac product lineup to its own chips because of their\u00a0higher performance and improved power efficiency.<\/p>\n
The\u00a0move will have multiple negative ramifications for Intel\u2019s chip business. The most obvious is the direct impact of losing revenue\u00a0as the sole processor supplier for Apple\u2019s PC line. The Mac currently represents 12% of the U.S. PC market based on\u00a0units sold, according to the latest Gartner data. And Bernstein estimates Apple\u2019s laptop line accounts for 2% to 4% of Intel\u2019s sales and mid- to high-single digit percentage of its earnings. Apple also will be able to leverage Taiwan Semiconductor Manufacturing Company Ltd.\u2019s\u00a0better 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.<\/p>\n
At first blush, the\u00a0financial 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 \u2014\u00a0an ability it has proven capable of in the smartphone market \u2014 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\u2019s move may pose a serious threat to\u00a0Intel\u2019s crown jewel server chip business. Here\u2019s how.<\/p>\n
Currently, Intel dominates the high-profit-margin data-center business, where it sells server chips to cloud-computing providers and corporations. The segment generated sales of $23.5 billion for Intel in 2019, with operating profit of $10.2 billion. And according to IDC, the chip maker held\u00a093% of the worldwide server processor market based on sales last year, versus Advanced Micro Devices Inc.\u2019s 5% share.<\/p>\n
While Intel has long been able to maintain its strong market position in the server space, the arrival of Arm-based Macs may change the game. Linus Torvalds, the creator of Linux,\u00a0has long said\u00a0the main reason Arm\u00a0chips have struggled to gain traction in servers was because there weren\u2019t any Arm-based PC platforms at critical mass. He cited the importance of\u00a0developers being able to iterate and test their server code on local machines. There have been Arm-based Windows laptops on the market, but they generally have not sold well. Now, though, with Mac shifting to Arm-based chips, developers will have tens of millions of Arm-based machines at their finger tips, offering a\u00a0thriving ecosystem for the up-and-coming chip architecture.<\/p>\n
Yes, it will take some time for Apple\u2019s move to impact the market. Intel is currently enjoying strong demand as employees are forced to buy more computer hardware to outfit their remote-working home offices, on top of surging cloud-computing demand for its chips as\u00a0internet services usage rises in the Covid-19 world. And applications must be ported to work well on Apple\u2019s Arm-based chip architecture.<\/p>\n
But in coming years, Intel\u2019s key businesses will be threatened by Apple\u2019s move. The step is an important one and will likely prove to be a turning point\u00a0for the chip industry.<\/p>\n
The\u00a0move will have multiple negative ramifications for Intel\u2019s chip business.<\/p>\n","protected":false},"author":341034,"featured_media":232227,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"idle","_sma_x_autopost_error":"","_sma_x_post_id":"","_sma_x_attempts":0,"footnotes":""},"categories":[15],"tags":[605,131,2120],"class_list":["post-355509","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-hardware","tag-apple","tag-intel","tag-mac"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/355509"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/341034"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=355509"}],"version-history":[{"count":0,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/355509\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media\/232227"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=355509"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=355509"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=355509"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}