Intel is sinking on news that Apple will make its own ARM-based processors for Mac computers

Justin Sullivan/Getty ImagesApple CEO Tim Cook.
  • Apple is working on its own processors for its laptops, which could ship as soon as 2020, according to a Bloomberg report.
  • The biggest advantage resulting from an Apple processor would be longer battery life.
  • Apple’s laptops currently use Intel processors. Intel shares dropped sharply on the news.

Apple will build its own processors for its laptops, Bloomberg reported on Monday, sending Intel shares down sharply.

These processors will be included in laptops as soon as 2020, and will be based on the ARM processor architecture, according to the report, which cites anonymous sources.

The move would represent a painful setback for Intel, which currently provides the microprocessors in Apple’s Macs. Although sales to Apple account for only a small portion of Intel’s overall revenue, the loss of Apple as a customer would be a significant blow to Intel’s prestige, calling into question the chipmaker’s longstanding hegemony in the PC business.

Apple has been gradually building up its chip design capabilities in recent years as it seeks to control as many aspects of its products as possible, from software to hardware to services. With its acquisition of several small semiconductor startups such as PA Semi and Intrinsity during the past decade, Apple is already designing its own chips which are used in products like the iPhone and the Apple Watch.

Back to the future for Apple

But creating its own microprocessor for a PC like the Mac, which has significant performance requirements, would mark a major ramping up of Apple’s ambitions – and carry plenty of risk. Apple previously produced its own PC processors, in partnership with IBM and Motorola, but switched to Intel chips in 2006 after concluding that the Mac product line-up suffered from a “gigahertz gap” because its processor’s speed could not keep up with the latest Intel chips.

If Apple were to once again revert to producing its own chips, it would mean switching from the x86 instruction set at the heart of Intel processors to the ARM architecture, which has become the standard for smartphone chips. The biggest advantage from an ARM-based Mac laptop would be improved battery life – closer to tablets than laptops. Currently, Apple’s iPad has a 10-hour battery life with a physically smaller battery than its laptops.

Such a move would require a significant rewriting of MacOS, Apple’s desktop software. Apple is currently working on an internal project to allow iPad and iPhone software to operate on Mac computers, according to the Bloomberg report.

Intel’s stock, which was already trading down in the broader market’s sell-off on Monday, plummeted further and was down nearly 9% at $US47.55 in midday trading. The stock recovered slightly and was down roughly 6% later in the trading session.

Apple declined to comment on the report. “We don’t comment on speculation about our customers,” an Intel spokesperson said.

You can read the entire report at Bloomberg.

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