Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Apple Going ARM Would Be a Nightmare for Intel


Bloomberg reported that Apple is considering a move away from Intel.


Over one year ago, I had this to say about Intel (NASDAQ:INTC):

Intel founder Andy Grove famously said that "only the paranoid survive."

So if I imagine myself as an Intel executive, I'm forced to ask the question, what would keep me up at night?

The answer is this: the arrival of Apple (NASDAQ:AAPL) or Microsoft (NASDAQ:MSFT) Windows PCs running on processors using ARM Holdings (NASDAQ:ARMH) designs instead of Intel chips.

Well, if a report from Bloomberg is correct, Apple is actually considering replacing the Intel processors used in the Mac line with the same kind of ARM-based chips used in the iPhone and iPad.

I'll cut right to the chase.

If -- and I'll emphasize that we're still in the "if" stage now -- this happens, consider it a nightmare scenario for Intel over the long term.

First, let's explore whether this is even possible.

My inclination is to say yes, it is. While Intel has a lot more experience than Apple in designing processors, Apple's come a long way in a very short period of time.

Look at the iPad line. It's less than three years old, but the newest fourth-generation model delivers screaming performance and extended battery life on a 9.7" 2048x1536 screen for just $500.

Think about how good these Apple processors will be in three to five years.

I bet they'll be more than fast enough to make Apple reconsider whether it makes sense to hand over 60%+ gross margins to Intel.

Furthermore, Apple would be able to run the same operating system across all devices -- PCs, tablets, smartphones, and whatever hasn't even been invented yet -- providing users with perfectly seamless transitions between different products.

Now let's talk Intel's side of the equation.

Keep in mind, I consider this to be a long-term risk for Intel -- something that could hit it three years from now at the absolute earliest, or not at all.
< Previous
Position in AAPL
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Featured Videos