Apple to Replace Intel with Custom Mac Chips by 2020

Eileen GuzmanApr 09, 2018

Intel shares dropped as much as 9.2 percent, the biggest intraday drop in more than two years, on the news.

Intel closed Monday's regular trading session down 6.07% or $3.16 to $48.92.

Apple could still theoretically abandon or delay the switch.

In other Apple news, insider Daniel J. Riccio sold 15,641 shares of the company's stock in a transaction that occurred on Friday, January 5th.

Neither Intel nor Apple have chose to comment on this report except to say that they don't comment on such claims, CNBC reports.

American Financial Network Advisory Services LLC cut its stake in shares of Apple (NASDAQ:AAPL) by 7.2% during the fourth quarter, according to the company in its most recent Form 13F filing with the Securities and Exchange Commission (SEC). This inadvertently means that Apple will stop sourcing the chipsets from Intel.

Apple has been manufacturing ARM-based chips to use in its Macs for quite some time now, but these chips mostly back the main Intel CPU when laptops are in the "Power Nap" session. "It makes sense to assume that they will go further in this direction", said Shannon Cross, analyst at Cross Research. The iPhone, for example, doesn't use Qualcomm processors like almost every other smartphone on the planet, using its own A-series of chips, and a customised GPU.

Computer makers AsusTek Computer Inc., Lenovo Group Ltd., HP Inc., and Dell Technologies Inc. use Intel chips. I imagine we'll see something similar here, with MicroLED rolling out on a small device like the Apple Watch, before spreading to larger devices in Apple's lineup. A future change away from Intel would likely require software re-writes that could be phased in over a number of years. Intel chips will nearly certainly remain in Apple's top-end machines like the iMac Pro and forthcoming Mac Pro revision until the company can produce in-house chips that are capable of meeting the demands of professional Mac users. Some reports are suggesting the release of a new, entry-level MacBook Air with Retina Display while others are saying Apple will unveil the Mac Pro the company promised. The only current Apple devices with screens larger than MacBooks are iMac desktops. The move will make it the only major computer manufacturer not to rely on Intel-made components. Over the years, numerous rivals have caught up. Intel also designs and builds modem chips for some iPhone models so that they can connect to cellular networks and make calls. On that note, the arrangement only constitutes five percent of Intel's annual revenue, so the loss won't really be that significant, all things considered.

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