Apple Could Turn to Intel for iPhone Chips, Move iPad to x86

| Analysis

Apple's Intel Processors?We have a tasty rumor for you today courtesy of analyst Doug Freedman of RBC Capital: according to a research note on Monday (via TechNewsWorld), Apple might turn to Intel to make its ARM processors for the iPhone, and in return move the iPad to Intel's x86 platform. All of this would take place under the backdrop of eliminating its reliance on Samsung, which currently makes Apple's A5X and A6 processors used in the iPhone and iPad.

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This would be a very big deal for all three companies. Samsung would lose billions in chip revenue—something that seems likely to happen no matter what—while Intel would gain a coveted piece of the mobile market that has otherwise remained out of reach. Apple would gain the world's largest, best, and most reliable chip manufacturer as its mobile partner.

With so much to gain, you may be asking yourself why Apple didn't go with Intel in the first place when it started making its own ARM processors for iPhone, and then iPad. While we aren't privy to what goes on behind closed doors, the reality is that Intel doesn't care for ARM—a reference platform not owned or controlled by Intel—and it doesn't otherwise manufacture ARM processors.

A perfect storm has been brewing, however, a storm that could serve to drive Apple and Intel into each other's arms with lustful hearts and wicked gleams in their eyes. That storm includes an eff-you to Samsung from Apple and Intel's failure to make meaningful penetration of the mobile market with its own line of ATOM processors.

Apple is the world's largest consumer of semiconductors, but when it comes to CPUs, only the chips used in Apple's Macintosh product line have the Intel logo. Apple sells millions of iPads and millions more iPhones. That's business Intel would love to have, and Mr. Freedman said Apple's iPad x86 business would be worth $2 billion per year to Intel.

Fabless

The other big factor here is that Intel is no one's fab. There are many so-called fabless chip designers, or companies that design chips and let companies like Samsung or Taiwan Semiconductor Manufacturing Company (TSMC) actually produce. Apple is one of those fabless chip designers, as it custom designs its AX-line of ARM processors and hires Samsung to make them.

Intel doesn't play that tune, however, or at least it hasn't heretofore. Intel makes its own chips from its own designs and sells those chips to companies like Dell, HP, Apple, and others.

"[Current CEO Paul] Otellini has been averse to this concept of Intel manufacturing products for other companies because Intel has historically wanted to be able to profit from both its manufacturing and design prowess," Nathan Brookwood, a research fellow at Insight 64, told MacNewsWorld.

Mr. Otellini is stepping down from the CEO spot in May of 2013, and the reality is that Apple's business is so large, it would be worth it to Intel to make this change.

Conclusions

One last thing: Apple was already rumored to be choosing TSMC as its replacement for Samsung. That rumor has had some legs for a while, but Mr. Freedman's story would represent an entirely different direction.

It's a direction that makes sense, though we think it important to stipulate that it's also dependent on Intel being able to make an X86 processor that is that is low enough in its power consumption to satisfy Apple's needs for the iPad.

That could be a tall order, because another rumor out there is that Apple is considering moving its Mac product line to ARM out of concern about Intel's commitment to low power consumption. That need is far greater for tablets, so we think this rumor needs to be taken with a grain of salt.

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12 Comments Leave Your Own

pats

Brian Intel already provides foundry service to a few FPGA providers so they fab for a few players, but Apple would be the big fish.  Intel has 3 fabs dedicated to 22NM and they are building out 3 14NM fabs so with the decline of the PC market they need somebody to buy wafers, and Apple is a good choice because it will give intel insight to what’s required for a winning mobile architecture and keep the fabs running near capacity.  Working with one customer is not much harder then dealing with your own engineering design group..

akcarver

Averse, not adverse. Averse means reluctant. Adverse means bad.

Bryan Chaffin

Thanks for catching that, akcarver. That was a quote as published by TNW, and I read right over it.

iJack

Power consumption notwithstanding, would the x86 chip qualify as a performance improvement boost to the iPad?  Presumably though, if Intel fabricate ARM processors for Apple, then the x86 would no longer be a consideration.  Right?

truff

Highly unlikely. Even though intel is moving forward with x86 for mobile, it is highly improbably for Apple to make a dramatic switch like that, it would through all existing apps into a sort of compatibility mode that would bog down any performance gains from an intel chip. Besides, even though Samsung fabricates the chips, Apple has invested heavily in their own chip designs, they have grown very different from the standard ARM architecture

jfbiii

They might decide to take Apple’s fab business, but the idea that there’s an x86 chip suitable for use in a iPad is as unlikely as unicorn blood batteries, IMO.

Aftermac

There have been great advancements in the field of unicorn blood batteries in recent years…

Lee Dronick

Just a few days ago North Korea announced that they found a unicorn lair. So if unicorns are indigenous to the Korean Peninsula then Samsung may hold he edge in unicorn blood batteries. There will be a lawsuit where Samsung sues Apple for ripping off their blood battery design, but Apple will argue that their technology comes from satyrs. Meanwhile some mountebank will file suit in an east Texas court claiming that their business, E-quis LLC, owns the patent on hemoelectric batteries.

http://www.theatlanticwire.com/global/2012/11/north-korea-says-they-unearthed-unicorn-lair/59483/

iJack

Um, Lee?  Hemoelectric batteries have been banned in the US since the late 80’s.  The Unicorn is a protected species.

Catch up, OK?

Aftermac

Sure, wild Unicorns are protected, but these would be genetically engineered clones, bred solely for the production of Hemoelectric batteries.

Lee Dronick

Speaking blood powered devices, San Diego Gas & Electric is always nagging me about my vampire appliances.

karlnor

While Samsung would love to get its hands on unicorn blood for those batteries, it might as well be on another planet since it seems to be located solely in north Korea.  Yeah they are on the same peninsula technically, but you can bet that not once drop is going to cross the DMZ.

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