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If Apple ARMs Itself, Then What?

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Apple (Nasdaq: AAPL  ) engineers are "confident" that the custom-designed ARM-based chips which now run the iPhone and iPad will one day be powerful enough to run Mac laptop and desktop computers, Bloomberg reported after talking to three people in the know who wish to remain anonymous.

If so, that would mean a move away from the Intel (Nasdaq: INTC  ) chips that have powered Apple's Mac line since 2005. That chip-change from the IBM-produced (NYSE: IBM  )  PowerPC processors was a major change for Apple, but it gave Mac users the ability to run Microsoft's (Nasdaq: MSFT  ) Windows operating system on the same computer that ran OS X.

So, what would another CPU change do for Apple?

It would create the basis for a more consistent operating environment across its full line of computers, phones, and tablets. As British-based ARM Holdings (Nasdaq: ARMH  ) is producing the 64-bit processors upon which Apple has based its A5, A6, and A6X chips, that is now possible.

The ARM chip architecture also uses less power than the Intel chip design. That translates to cooler-running devices. Energy efficiency and less heat for Mac laptops were major reasons Steve Jobs pushed for the transition from Power PC chips to Intel chips.

And what could such a change mean for Intel?

It certainly wouldn't be a good thing, especially with the sluggish demand for Windows computers already acting as a sea anchor on Intel's sales as well as those for chip maker AMD (NYSE: AMD  ) .

And what Apple does is often emulated by others. If Apple eventually makes the ARM jump, a follow-the-leader game could prove devastating to makers of other chips.

Recent developments of the personnel-type might also come into play regarding the future of ARM-based Macs. The resignation last week of Scott Forstall, Apple's head of iPhone software development, may open the door a bit further for ARM development.

Bob Mansfield, the head of Apple's newly formed technologies group, has been looking into different chip designs but did not have any sway over the software writing specialists who then worked for Forstall. Bloomberg reports a source saying that Mansfield was interested in combining iOS and the Mac, while Forstall's was focused on iOS for Apple's mobile devices. That potential impediment to ARM development is now gone.

But Intel has had a good seven-year run with Apple, and even if Apple is successful with a new ARM design for its Macs, a processor change and the mandatory rewriting of software to run on the new chips that such a change would require -- not to mention the development of translation software to allow older software to run on the new chips -- would push any such changeover well down the road.

By that time, a company like Intel, which has made large investments in new plants and research and development, could have some new tricks up its own sleeve.

When it comes to dominating markets, it doesn't get much better than Intel's position in the PC microprocessor arena. However, that market is maturing, and Intel finds itself in a precarious situation longer term if it doesn't find new avenues for growth. In this premium research report on Intel, our analyst runs through all of the key topics investors should understand about the chip giant. Better yet, you'll continue to receive updates as news develops for an entire year. Click here now to learn more.

Read/Post Comments (3) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 06, 2012, at 8:43 PM, chastenruin wrote:

    It will eventually happen. The more appropriate question is "When?"

    The growth in Mobile will force this change to happen over time for better compatibility between devices.

    I'm staying far away from Intel and Microsoft. That empire is dying.

  • Report this Comment On November 06, 2012, at 8:57 PM, EquityBull wrote:

    If they left Intel for their own ARM design's it would be Power PC all over again. This would be enough of a signal to me that they lost their way. Jobs was smart enough to finally dump Power PC for all the shortcomings that come from not going with the chip leader.

    Slow speed. Lagging development. Supply constraints. No x86 native for windows boot or vm's.

    I just hope this is nothing more than the same rehash of same rumor from a few months ago and that Apple really is not considering this.

    Whatever they are paying Intel for chips is well worth it. Do we really want to see new PC's running 4Ghz and 5Ghz systems while Apple is stuck at 2-3Ghz. That is a losing battle. Chip speed still matters for laptops and desktops. This was one reason the Power PC almost brought them to bankruptcy.

    Hope apple is smarter. End Rant.

  • Report this Comment On November 07, 2012, at 9:20 AM, mtechac wrote:

    Intel corporate stupidity is sinking Intel as a company. Without AMD as a credible x86 vendor partner, Intel is alone and not very desirable. Intel's back stabbing/deceptive behavior with his partners: Apple (Intel making their own Apple hardware clones laptops,tablets,etc) , HP, NVIDIA, AMD, SGI, etc.

    Intel's unethical practices against AMD, and Intel's failures to deliver on many key technologies (Larrabee, Itanium, etc) that have caused many companies to fail or get highly impacted (HP, SGI, etc).

    ARM sounds like a better investment since the ARM environment follow more ethical standards, they are open, they don't back stab themselves, they don't try to make a monopoly to overcharge customers, etc.

    x86 Technology has many issues that the new 64 bit ARM processors will not have. With AMD's 64 bit IP, it's deep experience, high-end GPU performance, and overall chip making knowledge, the 64 bit ARM processors will most likely wipe Intel's performance since they don't have many legacy issues and AMD knows where the x86 bottlenecks are.

    ARM now works in a very productive way with the cream of the crop in chip/technology industry: AMD, NVIDIA, APPLE, Qualcom, etc. Now Intel is just Intel with no real long term partners(i.e. AMD, Apple, NVIDIA, etc.). With Intel not being able to overcharge for their products, Intel's profits are going to continue to shrink and it will take years before Intel can do something about it..

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