Failing Business 101

The Idiotic Idea Of Apple Competing With Intel

There is a rumor going around that apple may try and replace Intel chips in it’s computers with their own in-house chip. Now, it’s certainly conceivable that apple will offer a cheap low-end laptop based on the chips it uses for the iPhone and iPad. Indeed, that’s probably a great opportunity. However, the idea that apple might switch completely to their own in-house Silicon is such a bad business idea that I have to assume they won’t try.

I mean suppose for a moment that apple thought they could outdo Intel and AMD in designing high end processors. What should apple do? Well they could design processors in-house just for their own computers limiting their potential profits and assuming substantial risk if they turn out to be wrong. Alternatively, they could spin off a new processor design company (perhaps with some kind of cooperation agreement) which could sell their processors to all interested parties while limiting their risk exposure. Now, I think the later option is clearly preferable and as it seems pretty implausible to think Intel and AMD are so badly run as to make such a venture attractive so it would be even less attractive to try and compete with Intel in house.

Now why doesn’t this same argument apply to apple’s choice to design it’s own ARM chips for the iPhone? First, apple was able to buy state of the art IP to start from which wouldn’t be available in they were designing a high performance desktop/laptop CPU. Secondly, because of the high degree of integration in mobile devices there were real synergies apple could realize by designing the chip and phone in combination, e.g., implementing custom hardware to support various iphone functions. Considering desktops and highend laptops there are no such pressures. There is plenty of space to put any dedicated hardware in another chip and no special apple specific features that would be particularly valuable to implement in the CPU.

On the other hand a cheap(er) laptop that could run iPad apps could be a great deal. Just don’t expect them to replace Intel chips on the high end systems.

Apple is actively working on Macs that replace Intel CPUs

A new Bloomberg report claims Apple is working on its own CPUs for the Mac, with the intent to ultimately replace the Intel chips in its computers with those it designs in-house. According to Bloomberg’s sources, the project (which is internally called Kalamata) is in the very early planning stages, but it has been approved by executives at the company.