Arm-Based Macs Could Help, Not Hinder, Intel

2 minute read
| Analysis

For several years, the idea of Apple switching from Intel to ARM processors has been tossed around. I once said I thought it ludicrous that Apple would make that switch. It looks like I might have to eat those words with some humble pie, though. Recently, the rumor has sprung back up and seems to be a more tangible prediction. The question is, will Arm-based Macs help or hinder Intel in the long run?

Arm-based Macs could help Intel

If Apple switches to Arm-based Macs, it might not be the headache that some suggest

Arm-based Macs Will Encourage Developers

John Martellaro recently explored why Arm hasn’t been big in enterprise, Intel’s bread and butter. Examining recent commentary by Bloomberg‘s Tae Kim, he pointed out that software development sector is still dominated by Intel chips. There just haven’t been enough PCs based on that chipset for the developers to work with. Arm-based Macs will help.

According to Kim, Linux creator Linus Torvalds has been saying for years why Arm chips haven’t made a run on the server industry. The lack of Arm-based platforms “at critical mass” has kept developers away. With “tens of millions of Arm-based machines at their finger tips (sic),” the ecosystem will become much more active.

Will That Move Truly Hurt Intel?

Another commentator, MarketWatch‘s Daniel Newman, isn’t convinced. Newman actually thinks that Intel losing Apple as a customer would be good news. The analyst stresses that Apple represents just two to four percent of Intel’s global sales. It’s a good chunk of change, to be sure. We’re talking somewhere between $1.5 billion and $3 billion.

However, it’s not something that Intel couldn’t make up for. Apple is a demanding customer, with a “history of putting immense pressure on vendors” With the loss of Apple, Intel will be able to put its energies elsewhere.

That means more focus on that bread and butter, not less. Intel’s growth these days isn’t in the PC market. The growth is in the company’s Data Center Group. April-quarter revenue for Intel’s PC division was still healthy, growing by 14 percent. Data Center saw much more explosive growth, though. That line item grew 43 percent year-over-year, accruing $7 billion in sales.

Can a Focus Shift Make Up for Arm-based Macs?

So, which analysis is right? I don’t know, and I don’t think anybody else can predict it just yet. I definitely wouldn’t call Arm-based Macs a death knell, though. Losing $3 billion in sales is definitely a hit, but if Intel can make up for that by shifting its energy more into data centers, networking, and Internet of Things, it might not take much for the company to more than make up for Apple’s shift to Arm-based Macs.

Intel has, since its early days, proven to be a resilient entity in IT. The company survived the move away from RISC-processors and saw the writing on the wall when it was time to abandon its Windows competitor, OS/2. There’s no doubt that Intel will survive the emergence of Arm-based Macs. It might even prove to be better off, focusing on its booming enterprise business even as ARM chips gain some traction

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Paul Goodwin

My 2 cents worth:   Given the state of the economy and Intel’s loss of Apple dollars, I doubt Intel will redirect people to work on other stuff. They will either trim people or let personnel attrition take care of the loss of income.   The Intel server business will likely not be impacted. Companies will likely not change their Intel based strategies. It takes far less money to continue business as usual and not spend development dollars on new ARM based systems. Companies that are already struggling financially in this shrunken economy won’t have a big enough carrot to… Read more »

brilor

Interesting topic but I’d like to see an analysis of whether ARM will help customers. Apple is clearly focusing on its own needs and would probably argue solutions to those would generally benefit the customer ( i.e. maybe more processor updates instead of products languishing for years -e.g. 2013 Mac Pro ). Despite adherence to its past mantras, its most recent history suggests customers are lower on its priority list.

wab95

Jeff:   Newman’s opinion piece on MarketWatch reads less like an objective analysis than it does like a data-supported adversarial argument in the court of public (investor) opinion. To be sure, your sober assessment that no one really can predict which of these arguments, ie Kim’s or Newman’s, will prove correct is the most honest and reasonable at this stage, if for no other reason than the effect modifier in either model, namely ARM – based Macs, have not even been announced yet, let alone released.    However, we can assess the relative strength of these arguments, and more importantly,… Read more »