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Is Intel on edge as Apple thinks different?

Updated: Jul 31, 2020

Intel’s long term monopoly of PC processors has come to an end with Apple announcing its in-house processor for the Mac called Apple Silicon.

Intel has been working with Apple since 2005 when Apple was much smaller in size and was trailing Windows in terms of computing power and performance.

With Apple now shifting to its own ARM systems based chipsets, the long time dominance of Intel in the microprocessor market is threatened. So far, its only close competitor was Advanced Micro Devices, which had net sales equal to just 10% of Intel's sales.

The break between the two is more symbolic than financial with merely 5% or about 3 Billion Dollars of Intel’s revenue being generated from Apple. However, the real risk is the trend this might set for other laptop manufacturers to manufacture their own processor chips, even though none other than Apple currently has the capability to design their own chipsets.

As for why Apple broke the partnership, there are 2 main reasons; First Intel was a long time leader in microprocessor technology but has fallen behind Taiwan Semiconductor Ltd, which manufactures the chipsets for Apple's iPhone and iPad.

Second, Intel was facing supply restraints and charged Apple $75 to $150 more on each chipset than what it would have cost Apple to manufacture those chipsets in-house.

Apart from reducing costs, Apple will have more control over its Mac, which in turn will allow for better and smoother performance and longer battery life.

With Apple focusing back on the Mac, it shows that the company is now gradually moving towards a strategy that delivers growth by leveraging all components of its vast ecosystem including smartwatches, music streaming, and other accessories, not just the iPhone.

Is Apple Silicon the future of microprocessors? How will this impact Intel in the long run? Only time will tell.


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