Apple will reportedly replace the Intel chips inside its computers with its own by 2020 according to a report in Bloomberg. Apple has been making its own chips for a while now and could completely replace Intel-made chips within two years.
Apple creates its own chips through the ARM-based silicon, these have been used in Apple computers but normally only as back-up to Intel’s main CPU. Apple is internally calling the switch process Kalamata and, according to online media, is still in its early stages.
Intel poses security risk
Apple may be concerned about security breaches that have been associated with Intel chips and want to close the loop around the production of their products. Apple has switched chips before, in the 90’s they went to PowerPC before going to Intel in the mid-2000’s.
Apple has so far declined to comment on the reports. Intel’s shares dropped slightly with the news but Stifel analyst Kevin Cassidy said he believed the market was “over reacting” to the report on Apple’s plans.
2020 is an ambitious goal
“We do not expect any other PC manufacturers will consider designing its own CPUs,” he wrote in a note. Other analysts believe replacing Intel by 2020 is far too ambitious.
“While it’s possible that Apple may replace Intel in some of its lower-end product lines, we think it will be difficult for Apple to completely replace Intel by 2020, especially on its higher-end offerings,” said Summit Insights group analyst Kin Ngai Chan.
Laptop market shrinking
Macs account for just a small proportion of Apple’s overall product package. Last year it sold 19.2 million units and accounting for just 11 percent of Apple’s $229.2 billion in revenue for fiscal 2017.
The laptop and desktop market has shrunk considerably since the rise of high-powered smartphones and tablets. Despite the overall slump in sales of laptops, Mac sales actually rose 4% in 2017.
Apple to control production loop
The move away from Intel marks a significant step forward for Apple to control each element of its products. It will also let Apple dictate the terms of its roadmap instead of having to rely on Intel setting the future chip development plan.
“We can push the envelope on innovation. We have better control over timing, over cost and over quality,” Chief Financial Officer Luca Maestri said of Apple’s chip efforts last year.
Apple-made chips already play important roles inside Mac computers. The Power Nap chip takes the load of the current Intel chip when the computer is asleep.
During this time, Power Nap lets the Mac do software updates, download email and sync iCloud. Apple-made chips are also present in iPhones, iPads and Apple watches.
This isn’t the first time rumors have swirled about Apple dumping its chip maker in favor of an in-house solution. If it does prove to be correct, expect a long slow transition to avoid any big upsets for consumers and developers alike.