According to the news report by Bloomberg, insider information has revealed that Apple is planning to replace the currently used Intel chips with its own in its Mac computers from as near as 2020.
This project, nicknamed Kalamata, is still in its early stages of development, but it a part of the bigger strategy that Apple has to make all its devices – iPhones, Macs and iPads – work seamlessly together. This is expected to be a multi-step project for the transition.
Apple’s partnership with Intel is what helped revive the Mac’s popularity, and then move by the tech giant would be a big blow to the chip maker. According to the supply-chain analysis by Bloomberg, Apple is responsible for 5% of Intel’s annual revenue.
When this news broke, Intel’s shares fell by as much as 9.2%, which is the company’s biggest intra-day trading drop in more than two years. The company’s shares finally closed down at 6.4% at the end of the trading day.
If Apple were to go ahead with this project, it would be a defining moment for the company. Right now, Intel processors are among the few only chips that are made by third parties to be used in Apple devices. Right now, iPhones, iPads, the Apple Watches and even Apple TVs all are fitted with main processors that are designed by Apple and are based on tech from Arm Holdings Plc.
By moving even the Macs over to Apple chips would mean Apple would then have full control of when it would want to release upgraded versions of the computer, rather than having to rely on when Intel would upgrade its chips.
According to Cross Research analyst, Shannon Cross, Apple is looking for ways in which it can integrate its hardware and software, and it makes sense for the company to do so. By vertically integrating its device components, the company gets to add more functionality to increase competitive differentiation.
This means that Apple would be more agile and would be able to bring out more new products and new features in existing products, giving the company and even stronger competitive edge.
Since last year, Apple has been working on a project – called Marzipan – to create a new software platform so that users can run iPhone and iPad apps on the Macs. Prior to that, Apple has released ARM-based co-processors which could run iOS-like operating systems on the Mac. It was used for security purposes. Currently, the latest models of the MacBook Pro and iMac Pro are fitted with these processors, and Apple plans to install them to a new version of the Mac Pro, which will be released in 2019l. The company is also planning to add this chip to new Mac laptops this year.
For the last ten year or so, Intel has more or less monopolized the computing processors’ market, with its only competitor, Advanced Micro Devices Inc. (AMD), lagging far behind. The chip maker currently also makes modem chips for iPhones models that need to connect to cellular networks to make calls. While Apple’s unit shipments with Intel processors is not that high, the company ranks third in terms of revenue for Intel.
Indications are that Apple will first experiment with these chips in laptops before moving to the more challenging desktop computers. The biggest challenge that Apple will face will be to ensure that the speed and capability that Intel chips currently give the Mac its current edge is not lost when the company moves to home-made chips.