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Old Mar 7, 2013, 09:20 AM   #1
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Apple and Intel Have Reportedly Discussed Deal for Production of Future iPhone and iPad Chips




Reuters reports that Intel's move into contract manufacturing of chips for other companies suggests that Apple could become a future customer with its A-series chips for the iPhone and iPad, potentially reducing its reliance on arch-rival Samsung as a supplier.
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A source close to one of the companies says Intel and Apple executives have discussed the issue in the past year but no agreement has been reached.
Intel has in the past always designed its own computer CPUs, which PC manufacturers like Apple then buy. Intel had previously expressed interest into moving toward some contract or "foundry" manufacturing of chips, although had indicated that it would be most interested in projects based on its existing technology.

But the growing trend away from PC and towards mobile devices continues to threaten Intel's core business, apparently prompting the company to more heavily consider acting as a foundry for distinct chip designs from third-party companies.
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Sunit Rikhi, vice president and general manager of Intel custom foundry, told Reuters last week his group is ready to take on a potential large, unidentified mobile customer, although he declined to discuss Apple specifically.

Intel spokesman Chuck Mulloy said the chipmaker is in constant discussions with Apple, which buys its PC chips, but he would not comment on negotiations about a potential foundry relationship. An Apple spokesman declined to comment.
Pat Becker Jr, of Becker Capital Management, believes the move would make sense for both Intel and Apple. "If you can have a strategic relationship where you're making chips for one of the largest mobile players, you should definitely consider that. And for Apple, that gets them a big advantage."

Article Link: Apple and Intel Have Reportedly Discussed Deal for Production of Future iPhone and iPad Chips
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Old Mar 7, 2013, 09:22 AM   #2
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I thought Intel aren't very good at making mobile chips just yet?

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Old Mar 7, 2013, 09:23 AM   #3
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I don't care all that much who makes the chips. I'd like to believe this competition would lead to cheaper chips and cheaper devices, but it is only likely to lead to cheaper chips and fatter margins.
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Old Mar 7, 2013, 09:23 AM   #4
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Old Mar 7, 2013, 09:24 AM   #5
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Originally Posted by slu View Post
I don't care all that much who makes the chips. I'd like to believe this competition would lead to cheaper chips and cheaper devices, but it is only likely to lead to cheaper chips and fatter margins.
Yes.

Why?

Because they can.
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Old Mar 7, 2013, 09:26 AM   #6
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why would it seem like making any deal between supplier xxxxxx and Apple would be like making a deal with Satan? I say that because this makes me think of how bad Walmart puts the squeeze on all their suppliers.

As much as I love Apple products, it seems like Apple would be the Walmart in this case.
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Old Mar 7, 2013, 09:31 AM   #7
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Quote:
Originally Posted by ozziegn View Post
why would it seem like making any deal between supplier xxxxxx and Apple would be like making a deal with Satan? I say that because this makes me think of how bad Walmart puts the squeeze on all their suppliers.

As much as I love Apple products, it seems like Apple would be the Walmart in this case.
And yet the suppliers don't complain about the enormous windfall and financial stability! I guess they don't share your faux outrage....
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Old Mar 7, 2013, 09:32 AM   #8
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Quote:
Originally Posted by ozziegn View Post
why would it seem like making any deal between supplier xxxxxx and Apple would be like making a deal with Satan? I say that because this makes me think of how bad Walmart puts the squeeze on all their suppliers.

As much as I love Apple products, it seems like Apple would be the Walmart in this case.
Intel are big boys with a fair bit of business sense. I don't see this as a Walmart thing.
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Old Mar 7, 2013, 09:35 AM   #9
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Oh man this is exciting. Lose the Samsung dependency!

EDIT: Does this mean OSX bootable iPads perhaps?!
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Old Mar 7, 2013, 09:36 AM   #10
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excess capacity

Fabs have very high capital costs; it makes sense for Intel to utilize excess capacity.
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Old Mar 7, 2013, 09:38 AM   #11
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Originally Posted by slu View Post
I don't care all that much who makes the chips. I'd like to believe this competition would lead to cheaper chips and cheaper devices, but it is only likely to lead to cheaper chips and fatter margins.
I'm not sure that's true. There are quite a few components in the iProduct. Sometimes some will go down in price and sometimes up. I'd guess it's constantly moving.

I think it does ultimately lead to cheaper prices. The iPad has stayed the same price but got faster and better (as has the iPhone largely). So better value for money. Seems price savings are being passed on. So are they getting fatter margins?

There'll have to be a new Intel sticker though "Intel made chip inside".
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Old Mar 7, 2013, 09:38 AM   #12
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Originally Posted by Mystic386 View Post
Intel are big boys with a fair bit of business sense. I don't see this as a Walmart thing.
+1. Intel is just like Apple, they have high margins on their products.
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Old Mar 7, 2013, 09:39 AM   #13
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Smart move by both parties. I think Intel is seeing the market change and while I'm sure they would like to see it change towards chips they themselves design, they are smart to hedge their bets. Apple is smart to look to source multiple production vendors.
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Old Mar 7, 2013, 09:39 AM   #14
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My inner fanboy is thinking "The less money that goes to Samsung the better".
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Old Mar 7, 2013, 09:50 AM   #15
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It would be a huge win for Intel. It all depends on if they can deliver the volume Apple needs for the price they demand. I'd also be curious how much capital Apple would be spending to help Intel outfit itself to product ARM processors.
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Old Mar 7, 2013, 09:52 AM   #16
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If I were Apple I probably won't rely on Intel for the long term, with the whole Ultrabook knockoff situation.
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Old Mar 7, 2013, 09:57 AM   #17
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Originally Posted by Kaibelf View Post
And yet the suppliers don't complain about the enormous windfall and financial stability! I guess they don't share your faux outrage....
lol - I take it you don't watch much TV, do you? If so, then you might have seen shows on channels like MSNBC where they do episodes on this very same subject. then they interview many of Wally World's suppliers that quite often say how bad Wally World puts the squeeze on their prices. which just about forces the supplier out of business.

so yeah, I can see the logic in your post.
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Old Mar 7, 2013, 10:01 AM   #18
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Would they still be using ARM architecture designs?
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Old Mar 7, 2013, 10:01 AM   #19
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its a win win solution I think.

intel needs to be in the game with mobile chip, as they are fairly lacking against arm.

and apple need other vendor than samsung.

Win!
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Old Mar 7, 2013, 10:06 AM   #20
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Would they still be using ARM architecture designs?
I hope so, x86 has been the slowest and most unproductive arch of the 21st century. Look at how cutting edge intel has been since Apple signed on with them. 3 years and still waiting on something other than menial bumps for the macpro, why because of intel's lack and or desire to raise any bar. although no need to when your a monopoly.
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Old Mar 7, 2013, 10:13 AM   #21
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Fate of Samsung. Apple becomes partner and sues when Intel takes a leap.
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Old Mar 7, 2013, 10:15 AM   #22
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Originally Posted by XboxMySocks View Post
Oh man this is exciting. Lose the Samsung dependency!

EDIT: Does this mean OSX bootable iPads perhaps?!
You know I am surprised there isn't more of a push for OSX bootable ipads. I see so many professionals with keyboards using the ipad more like a laptop these days. I would think it would be a huge user benefit to be able to run real programs on a tablet - sure it may be a little early but that is where we are headed.

I understand Apples reluctance to do it since it would eat into laptop sales but I think the ipad already is.
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Old Mar 7, 2013, 10:17 AM   #23
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Wow,

More proof of the changing tech world?

-or-

Another company heavily impacted by the iPhone?
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Old Mar 7, 2013, 10:18 AM   #24
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This has potentially huge upside for Apple and its customers

Intel is currently working at 22nm for Haswell. Samsung is way off the pace - the A6 chips currently in use in the Iphone 5 are made by Samsung using a 32nm process.
If Apple can get Intel to make its A series chips using the 22nm process that is a huge gain in terms of the processing power and energy consumption.
This could result in a significant jump in performance for the iPhone and iPad
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Old Mar 7, 2013, 10:18 AM   #25
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Would they still be using ARM architecture designs?
Would expect so. Nice little win-win for Intel. Access to ARM chips during the fab process and more production contracts.
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