Apple Inc. (AAPL) Doesn’t Have A Choice When It Comes To Chips: Intel Inc (INTC) CFO

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To continue producing powerful Mac machines, Apple Inc. (NASDAQ:AAPL) has no choice but to continue obtaining those chips from Intel Corporation (NASDAQ:INTC). According to Intel’s CFO, Stacy Smith, they are ahead of the competition in PC chip design, and there is no way their customers, such as Apple, can get a better alternative elsewhere. There have been rumors that Apple could consider making its own chips as it did before embracing Intel chip for Mac.

Apple Inc. (NASDAQ:AAPL) abandoned its own chips for the Mac to use those made by Intel in 2006. It came as a surprise announcement in 2005 that Apple would no longer power Mac with its own chips, however, recently there have been rumors that Apple could go back to making its own chips for Mac after all and abandon Intel.

Apple already makes chips for its iPad and iPhone devices. The chips used on those mobile devices are built by companies such as Samsung and are based on an ARM design.

Intel delays new chips

The major concern for Apple Inc. (NASDAQ:AAPL) seems to be that Intel is pushing out its new chips behind schedule. This has negatively affected Apple, as when it was forced to delay the release of the MacBook Air while waiting for Intel to launch a new powerful processor to use in the device.

However, according to Intel, they are not delaying introduction of chips at all. Also, there is nowhere Apple can find better processors for Mac than from Intel. Smith say Intel is currently way ahead of the competition and therefore PC makers, including Apple, have no choice but to stick with them for advanced processors.

Smith further stated that Intel and Apple believe in bringing ‘cool stuffs’ to market. Therefore, as long as they are designing great chips, they hope to continue working together to enable Apple to push out great products.

Risking performance

Intel believes that Apple Inc. (NASDAQ:AAPL) and other customers that depend on their chips, have no choice but to remain with them because of their superior chip design. Smith said that customers who abandon their chips face the potential risk of compromising the performance of their products.

Neha Gupta

Neha Gupta has been in the financial space for over six years now. Gupta earned her MBA degree from Symbiosis Centre of Distance Learning in 2009 and her passion for finance led her to pursue Chartered Financial Analyst (CFA) course. She has successfully completed Level II of her CFA. She is a veteran in article writing, which is depicted in her numerous pieces published on SeekingAlpha, Nextiphonenews, InsiderMonkey, MarketWatch, and Techinsider. Her crisp and eloquent writing finds its best place in Researchcows, where emphasis is given on developing rich content for various websites, products, business plans, trainings, and book writing.

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  • Jeffrey Holtmyer

    Any time a company says that their products are best then I say “Great this company truly believes in their product!”. Now I do believe Intel has had and continues to have great products. I do not believe that they are going to be the best for ever and ever. I believe that somebody will eventually surpase them in chip design. That company may be Apple or it may be AMD or even Qualcom. I have no crystal ball only a sense of history. In history every supreme company has gone down. I will use IBM and DEC as prime examples.

    • steve vrionis

      Always important to remember the lessons of history in investing. Good insight. Thanks

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