Daily Management Review

How much will Apple earn with its own processors?


04/04/2018


Apple's plans to abandon Intel processors in favor of its own development have become a topic for discussion of analysts. Experts believe that their own chips will reduce the cost of components.



iphonedigital via flickr
iphonedigital via flickr
If half of the company's computers are equipped with Apple processors, the US manufacturer's savings could be $ 500 million per year, said Bank of America Merrill Lynch analyst Wamsi Mohan. He also suggested that Apple will gradually transfer its desktops and laptops to a CPU of its own design, starting with inexpensive laptops.

"Independent chip development will benefit Apple, since the company will not depend on Intel's processor cycles, component costs will be reduced by $ 40-50, and R&D costs can be optimized and reduced," the analyst wrote in a note to customers.

In his opinion, Apple can also accelerate the development of its own products, if it uses its chips. In addition, it will be possible to combine teams of developers of mobile and desktop operating systems. The analyst sets the target price of Apple shares at $ 220, which is one-third more than the rate for the closing of the stock exchange on Monday, April 2.

Bloomberg reported about the possibility of installing processors developed by Apple in Mac, instead of Intel solutions, with reference to informed sources. The project is called Kalamata and is at an early stage of development. The first computers equipped with Apple processors should appear on sale by 2020. At the same time, the company will refuse to supply Intel, which, undoubtedly, will cause great damage to the largest manufacturer of computer chips.

Apple's development processors are likely to be based on the ARM architecture, the same one used in the processors for the iPhone and iPad. It is assumed that they will allow the company to make its ecosystem even more complete, and developers will be able to port applications from one platform to another, making minimum efforts.

Intel never disclosed the share of revenue attributable to Apple, but Cowen and Company analysts estimated only the revenue from the chips for LTE modems iPhone in 2016 at $ 1.5 billion with a total annual revenue of $ 60 billion.

As Bloomberg notes, Apple's refusal to produce Intel will be a blow to the American chip maker. According to the agency, Apple brings Intel about 5% of annual revenue. Apple has been using Intel chips in its computers since 2005. Intel shares on April 2 ended their trading in New York with a fall of more than 6%, falling more than $ 3 per share to $ 48.92 per day, according to the auction.

source: bloomberg.com






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