Intel Inside Apple?

• Email
• Share
• Print

It must be a boring Monday, because the rumor mills appear to be in full swing. Word has it that Apple (Nasdaq: AAPL) and Intel (Nasdaq: INTC) are in talks to put Intel chips into Apple products. Of course, the details and outcome of the potential deal both remain in the realm of conjecture, with neither company having admitted such talks exist.

Apple shares were up more than 5% in recent trading -- it appears some people got a bit overzealous about this news. Why might investors be excited? If Apple were to replace the chips it currently gets from IBM (NYSE: IBM) with Intel chips, then that might mean a cheaper Mac, as the costs to build the machines would decrease. (One of the traditionally accepted reasons that Macs have never reached ubiquity has been that Apple's computers are stylish and functional, but stinkin' expensive.)

Investor, beware. My Foolish neighbor Nate Parmelee (as well as one of the posters on our ultra-active Apple discussion board) pointed out to me that this Apple/Intel idea is a common rumor that seems to reappear every so often. So it's not a new concept, even though there are undoubtedly those of you (like myself) who have missed its previous iterations.

A less-expensive Mac line could certainly provide an added jump start to Apple's bottom line, along with the popularity of iPods. However, given that this is a common rumor that crops up occasionally, today's euphoria and its resulting higher stock price certainly seem premature -- maybe "ridiculous" is a better term. If you love Apple gossip (and let's face it, it's awfully fun to read about), that's fine. However, investors would be wise to hold their proverbial horses before stocking up on Apple on this news.

If you're hungry for more news about Apple, check out the following recent Foolish content:

• Gates recently took a bite out of Apple.
• Is Apple rolling toward video?
• Is Apple a Rule Breaker?

Do you believe the Apple/Intel rumor? What do you think? Intel chips inside Apple computers, iPods, wireless devices? Is it all just a tempest in a teapot? Kick around the ideas on our Apple discussion board.

Alyce Lomax does not own shares of any of the companies mentioned.