Later today, Apple (NASDAQ:AAPL) will have its long-awaited product launch event, and many people will be looking to see whether new MacBooks will be powered by Apple's own A10X processor rather than a processor from longtime Mac processor supplier, Intel (NASDAQ:INTC). Ahead of the reveal, I'm going to make a not-so-bold prediction and say that every MacBook Apple announces at this event will be powered by an Intel processor.
Author J.M. Manness, writing for Seeking Alpha, recently argued that some of the new Mac computers could sport Apple's own processor. The author cites a variety of reasons, including a recent "clue" embedded in a source code file related to Mac OS X, for why this will be the case -- though that clue was thoroughly debunked in this post over at RealWorldTech. Here are a couple of common-sense reasons why I disagree.
No financial evidence that Intel has lost this year's Macs
Perhaps the most convincing pieces of evidence are Intel's financial results in the third quarter and its guidance for the fourth quarter.
Apple is far from Intel's largest customer, but if one assumes that Intel sells Apple around 20 million chips per year at an average price of around $150, then it's not farfetched to assume that Intel's annual Apple-related revenue comes in at about $3 billion.
Even in the context of the nearly $60 billion in revenue that Intel is expected to bring in this year, that's not a small number. So if Apple were planning to ditch Intel in a high-volume Mac product, like a MacBook, then Intel would almost certainly report a sizable drop in revenue related to that design.
Instead, Intel positively pre-announced a much better-than-expected third quarter, largely because of better personal-computer chip sales, and its revenue in the fourth quarter is expected to be nearly the same as it was in the third quarter.
In a nutshell, there's no financial evidence to suggest that Intel will be missing from a new Mac.
Apple A10X won't be ready
Apple's current tablet-class processor, the A9X, has been in the market for nearly a year and isn't as fast as the latest Intel mobile processors. The A10X would be a more realistic option, but there's a catch: the A10X chip is expected to be manufactured in Taiwan Semiconductor Manufacturing Company's (NYSE:TSM) 10-nanometer manufacturing technology.
TSMC has gone on record to say it doesn't expect to recognize revenue from this technology until the first quarter of 2017. To support a MacBook launch on Oct. 27, Apple would have needed to put the A10X into production in the late June-to-early July timeframe. Considering that TSMC's 10-nanometer process wasn't ready to begin mass production at that point, this is a complete non-starter.
Now, Apple is expected to launch new iMacs in the middle of the first half of 2017, per Ming-Chi Kuo, so the A10X would be ready in time for those devices. However, it's extremely unlikely that Apple would outfit any member of its iMac line with a mobile-focused A10X chip that simply can't run macOS or any of the software that's written for it. A10X implements the ARM architecture; macOS is designed around the Intel, or x86, architecture.
Don't bet on seeing Intel get kicked out of the Mac anytime soon
There will always be those looking to bet on seeing Intel evicted from the Mac, and one day it may very well happen. However, as long as Intel continues to deliver excellent processors aimed at the notebook and desktop personal computer markets, I believe that the company will continue to enjoy many more years of Mac-related revenue.
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.