Intel CEO Dismisses Rumors Apple Will Turn to ARM for Macs

By Jeffrey Burt  |  Posted 2015-01-20 Print this article Print
Intel CEO Krzanich

Brian Krzanich said Intel processors offer the capabilities and innovation Apple needs for its popular line of computers.

Intel CEO Brian Krzanich is pushing back at the notion that Apple will soon replace Intel chips with its own ARM-based processors for its Macs.

Rumors that Apple would make the move have been circulating for years, and came to the forefront again last week when Ming-Chi Kuo, an analyst with KGI Securities, suggested it could happen as soon as next year. Apple makes its own ARM-based processors for iPhones and iPads, but has been using Intel chips for Macs since 2006.

Moving the Macs to a new architecture would offer its own host of challenges, such as making it more difficult to run Microsoft Windows on the systems. However, it would bring all of Apple's products onto the same architecture, and give Apple greater control over the processor technology.

That said, during an interview late last week on CNBC, Krzanich said he was confident Apple would keep its Macs running on Intel.

"Our relationship with Apple is strong and their products are great," he said. "Apple is always going to choose the supplier who can provide them the most amount of capability and innovation for them to build on. … They're a company based on innovation."

Intel's job is to provide products that are better than those of its competitors "and then [Apple wants] to use our parts," the CEO said. Whether it's Apple, Dell, Lenovo or any other customer, Intel needs to compete on performance, price and reliability.

The CNBC interview came a day after Intel executives announced its fourth-quarter and full-year 2014 financial numbers, which included record revenues due in large part to the strength of the company's server chip sales and the stronger-than-expected performance of the PC business.

However, the mobile business for the world's largest chip maker continued to struggle mightily, losing $4.2 billion during the year. Intel reached its goal by having 46 million Intel-based tablets ship during 2014, but that came at a cost as the chip maker paid device makers subsidies to use its chips. However, Krzanich and Chief Financial Officer Stacy Smith said during a conference call Jan. 15 that it was important for Intel to establish itself as a major supplier into the tablet space, and that going forward, the company would shift its mobile focus away from market share and toward profits and margins.

During the CNBC interview, Krzanich also was asked about Intel's mobile business, where it finds itself significantly trailing rival ARM, whose architecture is found in the bulk of smartphones and tablets on the market. The CEO said it was important for Intel to continue pushing into the space, given that increasingly fewer chip makers offer the technologies in their products for communications devices.

In addition, Intel needs to provide a wide range of offerings to businesses, he said. Most OEMs that sell PCs or servers want a single supplier for their processors for their other devices, as well.

"It's important that we're in the mobile space," Krzanich said. "You can't be absent from that space and expect also to be in the PC business, in the Internet of things business, and selling that same customer a server [chip] as well. You need to have this real broad base of products for customers."

Also during the interview, Krzanich said Intel is projecting flat PC unit shipments for 2015, with average selling prices falling a bit. Worldwide PC sales tumbled after 2011 due in large part to the growing popularity of tablets after the 2010 launch of the iPad. The global PC market stabilized during 2013, though according to some analyst reports, shipments continued to decline slightly.

Analysts have pointed to such factors as a saturation of the tablet market, new PC form factors and lower prices, Microsoft's ending support last year of Window's XP and businesses' need to refresh older PCs as key drivers for the improved showing of the PC market.

However, Krzanich said he was confident the chip maker had expanded its product portfolio enough so that it "can grow … with a PC base that's flat."



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