Two bits of news this week point to an intriguing conclusion: Sooner rather than later, Apple will have the ability—and just as importantly, the incentive—to create notebook computers that run on its own custom microchips, rather than ones made by Intel.
Intel’s chips have never been in Apple’s smartphones or tablets—the company notoriously passed on that opportunity in the earliest days of the iPhone, a mistake by then-CEO Paul Otellini that has to rank as one of the most head-smacking tech industry gaffes in the past decade. Everyone knows by now that tablets are cannibalizing sales of PCs, especially notebook PCs. And here’s the new trend: As the guts of mobile devices become ever more powerful, they are becoming more than adequate to replace the innards of even traditional “workhorse” devices like notebook PCs.
In the meantime, Intel still supplies the main processors for Apple’s laptop computers. These, like their Windows-based counterparts, have outsold desktop PCs in the US since 2008. But Intel’s toe-hold in Apple’s product line is looking increasingly shaky.
The first bit of news came from IT industry research firm Gartner on Monday. It predicted that the one category of “PC” in which sales are growing at a reasonable clip is the “ultramobile” notebook computer. That includes Apple’s MacBook Air, tablet/notebook hybrids, and some Chromebooks, the stripped-down laptops that run Google’s Chrome operating system.
Ultramobile computers don’t require an Intel chip—they can give most users more than enough power to carry out everyday computing tasks with a much more modest processor. Indeed, the Samsung Chromebook is basically a tablet with a keyboard attached, and runs on the same ARM-based processors that power pretty much every tablet on the planet.
Rumors that Apple might replace the Intel processor in the MacBook Air with the same processors it uses in the iPad and iPhone have abounded for years, but Apple CEO Tim Cook has consistently denied them. He once seemed to suggest that Apple would simply convert people to iPads instead, but that was in February 2012, and a lot has changed in a year and a half—and in particular, the runaway success of Samsung’s Chromebook, the one ultramobile running on the same class of non-Intel chips found in the iPad.
Samsung’s success proves that a perfectly usable laptop can be built on the innards of a tablet. And there is now a popular device category—low priced but functional ultramobiles—that Apple doesn’t make. That’s historically a signal that Apple is preparing to swoop in and make its own version. It’s exactly what happened with the iPad Mini, for example.
This leads us to the second reason Apple could ditch Intel in at least some of its notebook computers, whether they are notebooks are MacBook Air-like ultraportables or beefed-up iPads with a keyboard option: The first images of what may be Apple’s custom-built, most recent and most powerful mobile chip just surfaced.
It’s called the A7, and if the (not unsubstantiated) rumors are true, it should appear in the forthcoming iPhone 5s, succeeding the A6 chip that runs the iPhone 5 and the most recent iPad. Apple has continuously added talent to its in-house chip design group, with the most recent dozen or so hires all coming from Intel’s longstanding competitor AMD. These engineers are expert at building the graphics-intensive part of these all-in-one chips—the part that needs to be beefed up in order to support larger screens, higher resolutions and smooth graphics. Already, the ARM-based A6 chip is many times more powerful than the older-generation ARM processor in the Samsung Chromebook.
So here’s the intersection of the two trends that are squeezing Intel: Consumers are flocking to notebooks with relatively lightweight processors, and Apple’s iPhone and iPad microchips just keep getting more powerful. If Apple created an A7-powered laptop and ditched Intel chips in the PC industry’s sole growth category, it would leave Intel with nothing but dwindling desktop PCs, niche “high-end” notebooks, and the large-scale computer servers that make the internet possible. Servers are not a bad business to be in, but they’re not likely to stem Intel’s stubborn decline.