Could Intel Close Shop If Apple Takes Away Its Mac Business?



Apple likely contributed $3.1 billion of Intel’s top line in 2017

Apple is exploring using its own processors in future Mac computers, thereby dropping Intel (INTC) as a chip supplier for the product, according to Bloomberg. Mac computers featuring processors developed internally by Apple could start surfacing in the market as early as 2020, the report said.

Apple is a big Intel customer. Based on Bloomberg estimates that Intel draws 5.0% of its annual revenue from Apple, it contributed more than $3.1 billion of Intel’s revenue in 2017. Intel generated $62.8 billion in revenue in 2017, with the unit that supplies the PC (personal computer) market contributing most of the revenue.

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Mac sales fall, Apple’s share of the PC market drops

Besides Apple, Intel supplies PC makers (DVMT) HP (HPQ), Lenovo (LNVGY), and Asus. HP was the world’s top PC vendor in 1Q18, with a 22.6% share of the global market, according to IDC. While HP and Dell grew their share of the global PC market in 1Q18, Apple’s share of the market declined 4.8% YoY (year-over-year) to 6.6%. In its fiscal 1Q18 (calendar 4Q17), Apple recorded a 5.0% YoY drop in Mac computer shipments and revenue.

Apple previously ditched IBM chips in Mac

An exit by Apple could put Intel out of business or result in a significant blow. Apple used IBM (IBM) chips in its Mac computers before it switched to Intel chips in 2006. Revenue rose 4.0% at IBM in 2006. Additionally, Qualcomm (QCOM) is keen to grab the PC processor market from Intel’s control.


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