Apple’s New Macs Bode Well for Intel

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Apple (NASDAQ: AAPL  ) just announced a next-generation set of MacBook designs as well as its new Mac Pro, oriented for professional users. By all counts, these designs represent the best in their class. The Retina MacBook Pro has gotten rave reviews, and the Mac Pro looks to pack some serious hardware in a great form factor.

Of course, it's no secret that Intel (NASDAQ: INTC  ) , the world's largest semiconductor vendor by revenue, supplies the microprocessors for all of Apple's Mac products. While some may believe that Apple may be gunning to replace Intel in its Macs, following the recent launches and some of the statements that Apple's management made at its event, this seems highly unlikely.

Apple is keeping the Mac separate from (but related to) the iPad
It was obvious at Apple's event that it was looking to bring more functionality from the Mac to the iPad. This is a subtle difference from outright converging its notebook/desktop platforms and its tablet platforms as Microsoft (NASDAQ: MSFT  ) is gunning for with Windows 8.1. On one hand, it is very obvious that Apple is positioning its 9.7-inch iPad lineup as the mainstream (i.e. low price) computing device of choice to go up against low-cost notebooks. At the same time, Apple still sells a lot of Mac products at the higher end for those who need productivity devices/high-end laptops.

This signals that Apple is unlikely to switch to an iOS-based Mac, and given that Intel's processors in the low-power PC space are excellent, it is unlikely that Apple would want to make the switch from Intel's chips to an in-house chip that would potentially offer inferior performance per watt at the higher performance levels demanded by a notebook. This has been one of the major fears surrounding Intel with respect to Apple, but the odds of those fears coming true anytime in the near future seem next to nil.

Apple buys a very rich mix of products
Unlike most PC vendors that typically buy everything from the low-end Celerons and Pentiums to Core i3/i5/i7 parts, Apple doesn't buy low-end chips. Indeed, MacBook models typically come packed with at least Core i5 processors with plenty of room for upsell to Core i7 products. In fact, in the highest-end 15-inch Retina MacBook Pro, Apple is using a variant of Haswell that sports a feature known as Crystalwell. This is essentially a quad-core Haswell processor with a very high-end GPU configuration and on-package, high-performance memory, and it commands a significant ASP premium to non-Crystalwell chips.

While Apple is not a 10% customer for Intel, Apple's importance as a customer cannot be overstated. It is likely that MacOS will continue to gain share against Windows in the PC space, particularly in light of the recent software announcements from Apple as well as consumer dissatisfaction with Windows 8 and potentially 8.1. Having the Mac contract and keeping Apple happy should be a top priority for Intel's management, and the release of the Crystalwell chip (which many say was designed specifically for Apple) shows that Intel recognizes this, too.

Foolish bottom line
While the jury is still out on what Windows 8.1 PC sales will look like, it's clear that the best chance for outperformance in the PC space comes from Apple, with its refreshed Mac products. While the iPad certainly serves as a headwind to lower-end PCs powered by Intel, the new MacBook and Mac Pro systems are likely to sell very well. This means a richer mix and a confirmation that the Apple/Intel relationship is still alive and well. 

When will Apple destroy the MacBook Pro?
Apple has a history of cranking out revolutionary products... and then creatively destroying them with something better. Read about the future of Apple in the free report, “Apple Will Destroy Its Greatest Product.” Can Apple really disrupt its own iPhones and iPads? Find out by clicking here.

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