MacRumors' Eric Slivka recently penned an interesting article analyzing a leaked Intel (NASDAQ:INTC) processor road map in the context of how those plans will impact Apple's (NASDAQ:AAPL) Mac personal computer business. In particular, he points out that the death of Intel's Iris Pro graphics -- a high-performance integrated graphics option that Intel offered on its highest-end notebook processors -- could have an impact on Apple's processor choices in future iMacs.
Slivka points out that "there are a few possibilities including a return to dedicated graphics chips across the 15-inch MacBook Pro lineup or perhaps significant enough improvements in Intel's GT2 [graphics] tier to make it a viable primary option for low-end configurations."
I believe that the most likely option is the first one that Slivka brought up. Here's why.
Iris Pro is not good enough to completely displace stand-alone graphics
Even though Apple has been shipping 15-inch MacBook Pro systems with Intel processors packing Iris Pro graphics since 2013, the Mac maker has also offered customers the option to buy 15-inch MacBooks with stand-alone graphics processors since then, as well. As long as Apple planned to offer 15-inch MacBook Pros with a stand-alone graphics processor option, then the company would be forced to engineer the chassis of the computer to handle the thermal profile of the stand-alone graphics processor anyway.
In other words, unless Apple was willing to transition to integrated graphics only, it couldn't take advantage of the lower power consumption of the integrated solution to make the device smaller, thinner, and/or lighter. Clearly, Apple didn't think the performance of Iris Pro was good enough to be able to completely forgo a stand-alone graphics option in the 15-inch MacBook Pro.
The cost structure problem
The current 15-inch MacBook Pros -- all models, with or without stand-alone graphics -- use Intel processors with Iris Pro graphics included. The Intel processors with Iris Pro graphics are substantially more expensive to produce than the ones without Iris Pro graphics for a number of reasons. First of all, the size of the main processor die is much larger than a part that doesn't include Iris Pro. Additionally, the Iris Pro chips include a very large piece of Intel-designed memory that sits on the same chip package as the processor itself.
Indeed, according to a paper that Intel published at the International Solid State Circuits Conference (via AnandTech), or ISSCC, the size of a quad-core fourth-generation Core processor with the lower-end GT2 graphics came in at 177 square millimeters. The size of the main processor for the Iris Pro version is 260 square millimeters -- a substantial increase. Further, the size of the on-package memory -- manufactured in the same technology as the main processor -- is 77 square millimeters.
The rule of thumb is that, with all else being equal, a larger chip is more expensive to produce than a smaller one. So the problem that Apple faced from a cost structure perspective is this: All of the 15-inch MacBook Pros -- not just the ones that use stand-alone graphics -- used the more expensive Iris Pro chips.
This means that the 15-inch MacBook Pros with stand-alone graphics essentially had a graphics processor that was way oversized sitting there alongside the main processor. The on-package memory, according to AnandTech, provided modest performance benefits in some CPU-bound tasks, but the much higher cost structure likely doesn't justify those small performance increases.
From a cost-structure perspective, it probably makes sense for Apple to use processors with more modest integrated graphics processors and no on-package memory across the board, and simply include a low-cost stand-alone graphics processor in the system.
A premium system deserves premium performance
The performance of that stand-alone graphics processor is likely to be better than what Intel's integrated Iris Pro could deliver anyway, and if the stand-alone graphics solution winds up being a little more expensive to sell, then Apple could just increase the pricing of the base model of the 15-inch MacBook Pro a bit.
After all, when one is spending a minimum of $2,000 on a system -- and many customers are likely to pay for costly storage/memory/processor upgrades anyway -- a little bit of a price bump probably isn't going to radically change the demand profile for the systems.
Ashraf Eassa owns shares of Intel. The Motley Fool owns shares of and recommends Apple. The Motley Fool has the following options: long January 2018 $90 calls on Apple and short January 2018 $95 calls on Apple. The Motley Fool recommends Intel. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.