Apple Inc. (NASDAQ:AAPL) has been relying on Intel Corporation (NASDAQ:INTC) to supply the chips for its Mac computers for many years, but that could change. Some believe the company could switch to ARM-based chips at some point, which certainly seems plausible. Apple has been gradually shifting to making its own chips and owning the entire manufacturing process, although there are other reasons.
Writing in a post on Quartz, Jean-Louis Gassee makes the case. Of course switching to ARM-based chips may not mean that Apple is completely severing ties with Intel, as there have been recent reports that the two companies have been in talks for Intel to supply the iPhone 6 chips. Indeed, in February, Intel management said their company was actually growing closer to Apple in spite of reports stretching back years that the two companies could sever ties.
Intel’s chips are more expensive
Apple is known for charging a lot more for its products than other companies that offer similar devices. However, the company could cut prices if it switched from an Intel chip to an ARM-based chip. Years ago, Matt Richman estimated that Apple pays more than $300 for the i7 chip that’s in the MacBook Pro. Of course Intel essentially owns the x86 chip market and controls all parts of the market, like when customers will receive their chips and how much they pay.
ARM Holdings plc (ADR) (NASDAQ:ARMH) (LON:ARM), on the other hand, makes chips that are easier to make and thus charges less for them. Of course Apple may switch without cutting prices simply so that it can increase margins since people are willing to fork over so much money for an Apple device.
Apple introduces 64-bit iPhone chips
Last year with the introduction of the iPhone 5S, Apple showed off its first 64-bit mobile chip. Some suggested that the A7 chip could eventually power Macs, although others initially dismissed the idea, saying that the A7 didn’t have enough power to run them.
However, there’s no denying that Apple wants to run the entire show when it comes to its products. The company even introduced its own programming language at WWDC this year. Apple would also no longer have to delay the release of its Mac computers, which currently are on hold because Intel is late in delivering its new 14-nanometer Broadwell chips. Of course as Gassee notes, Apple’s semiconductor manufacturer might end up having the same problems, but at least Apple would have more control over the process.
Apple’s chips could power Macs after all
He also adds that he was wrong in saying that the A7 An chip wouldn’t be capable of powering high-end Macs. While the 64-bit chip is indeed optimized for mobile devices, he suggests that it would make sense that the A7 chip means Apple is capable of making a 3GHz A10 processor that’s optimized for the desktop.