• Home
  • Mail
  • Flickr
  • Tumblr
  • News
  • Sports
  • Finance
  • Entertainment
  • Lifestyle
  • Answers
  • Groups
  • More
Yahoo
    • Skip to Navigation
    • Skip to Main Content
    • Skip to Related Content
    Lifestyle Home
    Follow Us
    • Style
    • Beauty
    • Wellness
    • Pop Culture
    • News
    • Horoscope
    • Video
    • Polyvore

    Losing Apple won't kill Intel

    Daniel Howley
    Technology Editor
    Yahoo FinanceApril 2, 2018
    Reblog
    Share
    Tweet
    Share
    Apple’s reported decision to leave Intel won’t kill the chipmaker. (image: CNBC)

    Apple (AAPL) is reportedly developing its own processors to replace the chips that Intel (INTC) currently supplies for the iPhone maker’s Mac line of desktops and laptops. And according to Bloomberg, the changeover might happen as soon as 2020.

    As you’d expect, Intel’s shares took a major hit following the news, falling 6% at market close on Monday. It’s certainly a blow to Intel, but it may not be as big of a deal as the sell-off would suggest.

    That’s because Apple is only Intel’s fifth largest customer behind giants like Dell, HP and Lenovo, and according to Mercury Research’s Dean McCarron, makes up just $600 million in sales per quarter. In 2017, Intel’s PC division made $34 billion, Reuters reported. In total, the company made $62.8 billion in revenue in 2017.

    It’s also worth noting that Intel is still the undisputed leader when it comes to processors for desktop and laptop computers across the board. As McCarron points out, Intel owns 88% of the laptop and desktop market worldwide. Its nearest competitor, AMD (AMD) has seen growth in the sector as of late thanks to its Ryzen chips, but it’s still far from a threat to Intel’s dominance.

    And Apple hasn’t always used Intel chips. The Cupertino-based company previously used PowerPC processors, until former-CEO Steve Jobs announced the transition to Intel in 2005.

    By making its own chips, Apple would be able to build specific features into its laptops and desktops without the need of a third-party manufacturer like Intel. It would also enable Apple to further merge its Mac line of computers with mobile devices like the iPhone and iPad.

    Producing its own processors will also further differentiate Apple’s machines from competitors like Dell and Lenovo. But the company will have to ensure that its own chips are able to match the capabilities of its current Intel-powered computers.

    The challenges ahead

    While losing Apple will sting Intel, the desktop and laptop markets haven’t been bastions of good fortune for the chipmaker over the last few years. Sales of PCs decreased precipitously for years, as fewer people upgrade as often, and smartphones and tablets have become the primary computing devices for more consumers.

    More recently, sales have begun to even out, with IDC reporting that the market saw 0.7% year-over-year growth in the fourth quarter of 2017, noting not to expect astronomical growth from this sector.

    As far as overall PC share goes, Apple’s laptops, desktops and workstations made up just 8.2% of the market, with HP, Lenovo and Dell making up the vast majority of sales.

    Intel was also hit especially hard by the revelation of the Spectre processor flaw that made it possible for hackers to gain access to fundamental pieces of users’ computers by tripping up the company’s CPUs. AMD had similar problems with a slightly different flaw, but since Intel makes up such a dramatic portion of the market, the Spectre flaw impacted a far larger number of consumers.

    While Intel is best known for its stickers on PCs indicating the presence of the company’s chips under the hood, the most important business for the processor giant is the cloud. Intel powers the vast majority of servers currently in use.

    In fact, according to U.S. News & World Report, Bank of America analyst Vivek Arya indicates that Intel controls more than 90% of the server market. And while the PC industry isn’t predicted to see huge growth opportunities anytime soon, Arya says the cloud industry could see capital expenditure growth of 30% in 2018.

    But Intel’s lead isn’t necessarily safe, as Nvidia and AMD are working to dethrone the current market leader. Nvidia (NVDA) in particular highlighted its server business during the Consumer Electronic Show earlier this year, pointing out the power savings clients could see by using Nvidia-powered servers.

    So, while losing Apple is sure to take the wind out of Intel’s sales in the short term, it’s unlikely to truly hurt the company going forward.

    More from Dan:

    • These companies and celebrities are done with Facebook
    • How Apple aims to win its share of the $17.7 billion education market
    • New Apple iPad hands-on: The same, but different
    • Why your iPhone isn’t ringing and how to fix it

     

    Email Daniel Howley at dhowley@yahoo-inc.com; follow him on Twitter at @DanielHowley.

    Follow Yahoo Finance on Facebook, Twitter, Instagram, and LinkedIn

    Reblog
    Share
    Tweet
    Share
    Polyvore

    What to Read Next

    • People are mocking Ivanka Trump for wearing a pantsuit

      Yahoo Lifestyle
    • Ashley Graham makes a major statement with sheer little black dress

      Yahoo Lifestyle
    • Rachel Weisz is pregnant at 48 and people are confused

      Yahoo Lifestyle
    • The End of an Era: Queen Elizabeth Names Her Successor

      PureWow
    • Melania Trump Sits Next to Barack Obama at Barbara Bush’s Funeral

      Vanity Fair
    • Melania Trump Invited White House Staffers to Barbara Bush Funeral So They Could 'Pay Their Respects'

      People
    • People are boycotting LA Fitness over racist incident, despite apology

      Yahoo Lifestyle
    • Lauren Bush Lauren Welcomes Son Max Two Days After Loss of Grandmother Barbara Bush

      W
    • Kangaroo Dies After Visitors At Chinese Zoo Hurl Rocks To Force Her To Jump

      HuffPost
    • Expert: Melania Trump may be sending a secret message with her outfits

      AOL.com
    • Kylie Jenner Shared Two New Pictures of Stormi

      Marie Claire
    • Carrie Underwood Reveals Her Scar For The First Time After Getting 40+ Stitches In Her Face

      YourTango
    • For Bella and Yolanda Hadid, Mother-Daughter Bikinis are a Thing

      InStyle
    • Jim Carrey Turns Paintbrush On Rudy Giuliani With Ghoulish New Portrait

      HuffPost
    • 'Throw out' all romaine lettuce, CDC advises, as E. coli warning expands

      Yahoo Lifestyle
    • Melania Trump, Michelle Obama, Jenna Bush Hager, and more don black at Barbara Bush memorial

      Yahoo Lifestyle

    Neo-Nazis March in Georgia To Mark Hitler's Birthday

    clarence: Why does the media even cover it?

    Join the Conversation
    1 / 5

    98

    • Meghan Markle recycles a $1,995 Alexander McQueen jacket

      Yahoo Lifestyle
    • Jenna Dewan is getting shamed for posting underwear campaign pics after split from Channing Tatum

      Yahoo Lifestyle
    • Meghan Markle Stuns in Cape Dress While Attending Queen Elizabeth's Birthday Celebrations With Prince Harry

      Entertainment Tonight
    • Behati Prinsloo Gets Mom-Shamed for Her "Pump and Dump" Breastfeeding Photo at Coachella

      Allure
    • Reese's sent this guy a mountain of free candy and a handwritten note after he complained about a peanut butter cup

      Hello Giggles
    • Jimmy Fallon choked up last night while paying special tribute to Tina Fey

      Hello Giggles
    • Jeb Bush Shares Old Love Letter from George H.W. Bush to Barbara in Touching Speech at Funeral

      People
    • To the Target Employee Who Can't 'See' My Invisible Illness

      The Mighty
    • The Royal Wedding Will Give Kate Middleton A Chance To...Relax?

      Refinery29
    • Kim making out with Kanye at Kourtney's b-day party will remind you love is real

      Hello Giggles
    • ICYMI: Rachel Weisz has an 11-year-old son with director Darren Aronofsky (aka Jennifer Lawrence's ex)

      Hello Giggles
    • The 'Scandal' Finale Gave Olivia Pope the Ending She Was Always Destined For

      Glamour
    • Carrie Underwood’s Latest Selfie Proves She’s Ready To Show Her Scars

      Refinery29
    • Bond, Baby Bond: Rachel Weisz and Daniel Craig Are Expecting First Child Together

      PureWow
    • What is pancreatitis? Popular DJ Avicii, 28, dies after years of health problems

      Yahoo Lifestyle
    • Anna Faris and Chris Pratt "Completely" Agree That "Divorce Sucks"

      Brides
    Polyvore