By John Miles
EVP & Associate Publisher
In 2005, Apple made a public announcement that they would start using Intel x86 processors for their Mac computers. The transition helped to revive Apple’s Mac success with great results, leading Apple to gain a gigantic market value of $900 billion. But not every story has a successful conclusion. Apple’s decision to switch away from Intel may represent part of a wider trend of big customers moving to design their own components. But, why would Apple and other technology companies build their own?
Shannon Cross, an analyst at Cross Research, said, “We think that Apple is looking at ways to further integrate their hardware and software platforms, and they’ve clearly made some moves in the space, trying to integrate iOS and macOS. “ She added, “It makes sense that they are going in this direction. If you look at incremental R&D spend, it’s gone into ways to try to vertically integrate their components so they can add more functionality for competitive differentiation.”
According to reports, Apple is planning to switch processors for their Mac computers by the year 2020. The initiative called Kalamata is still in its initial period but they will transition from using Intel processors to their very own chips. Five percent of Intel’s revenue comes from Apple but the fallout could be much larger if other manufacturers follow suit.
If deemed successful, Apple will create a history of becoming the first PC maker to use its own central processing units. Companies that use Intel chips include Asustek Computer, Inc., Dell Technologies, Inc., HPInc., and the Lenovo Group Ltd.
Why Make The Transition Now?
Apple is known for producing top of the line devices like its iPads, iPhones, Apple TVs, and Apple Watches. All of these gadgets use similar processors that are devised by Apple with the assistance from one of their partners, Arm Holdings PLC. With Apple having its own hardware, software and processor, it will create a more fully integrated experience compared to any other company.
Arm Holdings PLC is an England-based company that develops software and semiconductor tools.
In addition to allowing the Apple devices to work as one, the Kalamata initiative could also help the company release new models on its own pace, as they will no longer rely on Intel’s processor availability. Also, as artificial intelligence and other advances are proprietary to Apple and by using their own processors, they can keep these advances more protected from competitors copying their advances.
Another reason why Apple also considers switching processors is Intel’s stationary performance over the years. There is no doubt that the processors of Intel are all reliable, time-tested, and durable. It seems like everything is going as planned for Intel, causing them not to change anything – and unfortunately, that is where the problem begins.
Apple’s processors for their devices have accelerated over time, even defeating the chips that were developed by Intel for its own computer lines. Apple does not want their Mac computers to be left behind, which obviously is key to their decision to choose a different route. Apple is also working on a new software platform called Marzipan that would allow users to run iPhone and iPad apps on Macs. The products are slated to be released in September this year.
Apple Saw It Coming
Even before the Kalamata initiative took place, Apple was already doing researching and creating innovation for their processors.
Because Apple wants its devices to work as one, it came up with a bold idea to develop a new software platform labeled as ‘Marzipan’. The new software is going to be a cross-platform application that will have the ability to combine iOS and macOS. It means that Marzipan could be operated on iPad, iPhone, and Mac computers.
Apple has also presented Mac computers that are based on ARM co-processors. The technology has the capability to run an operating system of an iOS that could better the security measures of the Mac products. Reports have suggested that next year, Apple will release Mac products with ARM-based co-processors.
The possible separation of the two powerhouse companies will surely hurt Intel’s performance and is a bold move by Apple. The question becomes, will the other computer manufacturers follow Apple’s lead or stick with Intel in the future.
John R. Miles
EVP & Associate Publisher
John R. Miles is Executive Vice President of Business Development and Associate Publisher of Bold Business. He is a sought-after motivational speaker and writer. He brings visionary leadership style and talent as a Navy Veteran and an internationally experienced CEO, COO, and Fortune 50 CIO across a multitude of industries. Miles is also an operating partner at the Virgo Investment Group where he is responsible for identifying and pursuing new investments while supporting existing portfolio companies with operational expertise. He is active on Linkedin and Twitter and published in a variety of media. Miles graduated with honors from the U.S. Naval Academy where he was a varsity athlete.