Apple’s Revolutionary Laptop Could Be Far More Important to Intel

Allegedly, Apple (NASDAQ: AAPL  ) is working on a new, 12-inch MacBook that could "redefine laptop computing." That comes from Ming-Chi Kuo (via 9to5Mac), an Apple analyst at KGI Securities with an impressive record of correctly predicting Apple's upcoming products.

Regardless of how revolutionary the laptop ends up being, it's not likely to matter much to Apple -- the King of Cupertino continues to derive the vast majority of both its revenue and profit from iOS devices. Still, Kuo's report appears to be good news for chipmaker Intel (NASDAQ: INTC  ) as it continues to struggle with competition from chips based on ARM Holdings' (NASDAQ: ARMH  ) designs.

Kuo says a new breed of MacBook is coming next year
If Kuo's report is to be believed, Apple will release a 12-inch MacBook in the second or third quarter of next year. It will be lighter than the current 11-inch MacBook Air, but as productive as the 13-inch moadel.

This new MacBook will have a Retina display, and a possibly a lower price tag. Kuo doesn't suggest it, but I wonder if this new 12-inch model will replace both the 11- and 13-inch MacBook Airs, as Apple looks to consolidate its lineup of PCs. In recent years, Apple has cut down on the number of computers it offers, eliminating the standard MacBook and discontinuing the 17-inch MacBook Pro.

But far more important is Kuo's assertion that this new MacBook will sport an Intel chip. In recent weeks, speculation has grown that Apple would make the jump to ARM-based chips for its lineup of MacBooks. If Apple had abandoned Intel, it would've been a further blow to Intel's business.

Apple's supercharged iPhone
Apple's latest iPhone, the iPhone 5s, sports a 64-bit processor, a first among smartphones. Apple's competitors, including Samsung, only offer 32-bit processors, even in their most expensive models. Admittedly, that much power isn't really necessary for a phone (at least for now), but it could be used to power a laptop.

Gigaom's Stacey Higginbotham speculated that Apple would eventually use its AX chips in its MacBooks. Apple has already ported OS X to ARM Holdings-based architecture; using its own ARM Holdings-based chips in future MacBooks is hardly a stretch.

Of course, Apple might choose to do that, eventually. Even if the first iteration of this new MacBook uses an Intel chip, there's nothing to say that Apple won't eventually abandon Intel at some future date.

Will ARM Holdings conqueror Intel's traditional market?
And if Apple makes the jump, other PC makers could follow. As the MacBook Air kicked off the trend of lighter, thinner laptops, so too could the move to ARM Holdings-based chips become the industry norm.

Over the last three years, shares of ARM Holdings have rallied over 150%, while Intel shares have badly underperformed. Since Oct. 2010, Intel shares are up just 24%, compared to the S&P 500's 46% gain.

Mobile devices have taken the world by storm, eating away at the demand for traditional PCs, Intel's primary market. Although Intel has made inroads into mobile, including getting its chips into a Samsung tablet and a Lenovo smartphone, chips based on ARM Holdings' designs continue to dominate.

Nevertheless, so long as there is a demand for traditional PCs, Intel should have a market for its processors -- that is, unless Apple decides to switch. If laptops powered by ARM Holdings-based chips eventually became the norm, Intel could lose out on its traditional market.

Intel investors should keep an eye on Apple's chips
The iPhone 5s' 64-bit ARM Holdings-based chip is certainly powerful, perhaps powerful enough for a MacBook Air. But according to Kuo, Apple is sticking by Intel, at least for 2014.

Longer-term, the migration away from Intel remains an area of concern for investors in Intel. Admittedly, Apple's Macs comprise but a small subsection of the larger PC market, but as Apple's move into lighter laptops became an industrywide trend, so too could it's decision to use chips based on ARM Holdings' designs.

Overall, this is one trend investors in the space need to keep an eye on.

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