Consumer technology giant Apple is getting ready to replace the Intel processors used in its PCs with silicon developed by British company ARM, according to a Nov. 6 report in Bloomberg, which quoted unnamed sources familiar with the situation.
Apple has been using Intel chips in its PCs since 2005, and the transition wouldn’t happen for a few more years, the sources said. Processors from ARM, which licenses chip designs to Qualcomm and others, are currently found in Apple’s iPhone and iPad products.
An investor note from Sterne Agee said it would take some time before Apple can optimize the chips to run the Mac OS X operating system, but noted that eventually the ARM processors would be powerful enough to run intensive Mac applications. Sterne Agee analyst Shaw Wu said the migration to a proprietary chip was inevitable.
“We are frankly not surprised as this has been talked about since iPad shipped in 2010 and Mac OS X Lion in 2011 that borrowed heavily from iOS. We believe it is inevitable to merge iOS and Mac but not likely for a few years as Mac code is optimized for [Intel chips],” the note said. “While we believe it is inevitable that [OS X and iOS] merge at some point, we don’t believe it will likely happen for a few years. From our understanding, the key reason is because OS X is optimized for Intel x86 processors while iOS is for ARM RISC. It will likely take some time to optimize OS X and hence Mac for ARM.”
This is a challenge to Intel to deliver stronger battery life; an 11-inch MacBook Air, the smallest-form-factor mobile Mac, delivers battery life of about four to five hours under heavy use, which is only half the nine to 10 hours for an iPad, Wu wrote. The note said one key argument for the change is to simplify the architecture and to take advantage of the large code base that has been developed on iOS by Apple itself as well as through third-party vendors through the App Store.
“In addition, merging could also allow Apple to deliver a more seamless and integrated experience across its platforms,” Wu wrote. “The other reality is that Mac represents only 14 to 18 percent of its revenue, compared with 45 to 50 percent for iPhone and 20 to 25 percent for the iPad.”
The note also touched on Apple’s announcement that it sold 3 million iPads over its opening weekend for the iPad Mini and its fourth-generation iPad, topping the 1.5 million third-generation WiFi iPads sold in March. Wu noted that the 3 million figure was at the upper end of expectations for 1 to 3 million units.
“While the company did not provide a detailed breakout, our supply chain checks indicate that iPad Mini accounted for the majority of units. We believe this should help alleviate concerns that its $329 price point is too high,” Wu wrote. “We continue to believe iPad Mini is the competition’s worst nightmare as it slows down adoption of competitors’ tablets and Windows 8. We remain comfortable with our December-quarter forecast of 25 million units, versus 14 million shipped in the September quarter.”
