Analyst: Apple Ditching Intel is Inevitable

Following a report that Apple is considering moving away from Intel processors for the Mac, Sterne Agee analyst Shaw Wu says that's exactly what will happen, but don't count on seeing the change any time soon.

Shaw Wu thinks Apple will drop Intel chips for future MacsShaw Wu thinks Apple will drop Intel chips from future Macs

"While we believe it is inevitable that Mac + OS X and iPhone + iPad + iOS merge at some point, we don't believe it will likely happen for a few years. From our understanding, the key reason is because OS X is optimized for Intel x86 processors while iOS is for ARM RISC (reduced instruction set computing)," Mr. Wu said. "It will likely take some time to optimize OS X and hence Mac for ARM. In addition, Intel processors are much more powerful for running compute-intensive Mac applications and for development."

Apple executives have apparently told Intel ARM-based designs are in the works, which Mr. Wu sees as a tactic to get the chip maker to more actively pursue more energy efficient processors.

Mr. Wu said,

We believe this is a challenge to Intel to deliver stronger battery life. Today when using an 11-inch MacBook Air, the smallest form factor mobile Mac, we notice that it lasts about 4-5 hours under heavy use which is only half of 9-10 hours for an iPad.

Apple is likely testing ARM-based hardware for Macs already, just as it did with Intel chips long before abandoning its older PowerPC architecture. That doesn't, however, mean the company is ready to walk away from Intel. Instead, Apple is most likely working to keep all of its future options on the table.

Insider sources claimed that Apple has been designing Macs that use ARM processors, much like the iPhone and iPad, instead of Intel chips to overcome power consumption issues and to create a unified OS X and iOS architecture.

"One key argument to merge is to simplify the architecture but to also take advantage of the large code base that has been developed on iOS by AAPL itself as well as through third-party vendors via the App Store," Mr. Wu said. "In addition, merging could also allow AAPL to deliver a more seamless and integrated experience across its platforms."

Mr. Wu has a "Buy" rating and US$840 target price on Apple's stock. Apple is currently trading at $589.18, up 4.56 (0.78%).