Intel Corp.’s (INTC) stock came under pressure in the first week of April trading after Bloomberg reported Apple (AAPL) could go it alone when it comes to the chips that power its Mac computers.
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Following this news, the INTEL shares dropped to around 5% the biggest drop in it for more than two consecutive years. However, it is allegedly just a part of a bigger project that will enable Apple’s devices, including Macs, iPhones, and iPads, to “work more similarly and seamlessly together”. According to reports from Bloomberg, this may happen as early as 2020. The Mac plays a small part in Apple’s overall financial picture, with sales of 19.2 million units a year ago and accounting for 11 percent of Apple’s $229.2 billion in revenue for fiscal 2017.
“By using its own chips, Apple would be able to more tightly integrate new hardware and software, potentially resulting in systems with better battery life – similar to iPads, which use Apple chips”. One analyst has rated the stock with a sell rating, eighteen have assigned a hold rating, thirty-one have issued a buy rating and one has assigned a strong buy rating to the company.
Apple and Intel declined to comment on the report.
The shift would be a blow to Intel, whose partnership helped revive Apple’s Mac success and linked the chipmaker to one of the leading brands in electronics.
Apple creates its own chips through the ARM-based silicon, these have been used in Apple computers but normally only as back-up to Intel’s main CPU. The next-gen screen technology will also serve as the display for a new kind of product: Apple-made augmented-reality glasses, at least according to a report from DigiTimes. However, the company has failed to make inroads into the mobile chipset space (despite heavy investment), allowing the likes of Qualcomm to flourish and establish themselves. So while high-end machines would likely continue to use Intel – at least in the short term – it’s possible the entry-level MacBook, or possible future MacBook Airs might be the first to get the All-Apple treatment.
Apple’s new computer CPU plans are codenamed “Kalamata” and are said to be in their early stages of development at this time.
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There are some pairings that just make sense. We wait and watch.
