In 2015, Apple (NASDAQ:AAPL) introduced a new line of notebook computers, known simply as MacBook. The MacBook's key selling points were that it was extremely thin and light and that the processor inside consumed so little power that it didn't need an active cooling solution, making it whisper quiet.
The first MacBook used a processor family from Intel (NASDAQ:INTC) known as Broadwell-Y. These chips consumed very little power, but the performance of the chips was pretty poor, limiting the MacBook to customers willing to sacrifice significant performance for portability and low noise.
Over time, Intel improved its Y-series of low-power notebook processors, which allowed Apple to dramatically improve the performance capabilities of the MacBook in 2016 with Skylake-Y, and then in 2017 with Kaby Lake-Y.
Ideally, Intel should continue to put out new processors to allow Apple to advance this product line at an annual clip. While Intel certainly tries to do so, it seems that the chip giant's issues in trying to manufacture chips using its 10nm technology is going to make it so that the follow on to Kaby Lake-Y, known as Cannon Lake-Y, won't arrive anytime soon. This will impede Apple's ability to refresh its 12-inch MacBook in the near future.
Bloomberg recently reported that Apple is mulling over a switch toward its own processors in the Mac, in 2020 at the earliest. Although it's conceivable that Apple is planning a wholesale switch away from Intel across its Mac lineup, it would be a difficult undertaking.
Instead, it probably makes more sense for Apple to replace Intel where it makes sense -- in the 12-inch MacBook. Allow me to explain.
Apple already designs better low-power processors
Over the years, Intel has dramatically improved the power efficiency of its processors, which has enabled products like Apple's 12-inch MacBook, as well as much longer battery lives in traditional notebook computers. However, when it comes to processors designed to consume roughly 5 watts, Apple has a critical advantage over Intel.
For example, the A11 Bionic in the latest iPhone already matches Intel's latest Y-series processor in both single-core performance, while outperforming it in multi-core performance in the popular Geekbench 4 processor performance test. What's even worse for Intel, however, is that the A11 Bionic is due to be replaced by the A12 in about five months, while Intel's own replacement for Kaby Lake-Y may not see the light of day until 2019.
Apple already designs better low-power processors than Intel does, and I think something like the A11 Bionic -- or more likely, its higher-performance counterpart that'll be featured in the next iPad -- would be more than adequate for a future 12-inch MacBook.
Apple's chip teams are more reliable than Intel's
If Intel released new processors at a consistent, predictable pace for low-power computers, then being a bit behind Apple in terms of performance and power efficiency might not be enough to push Apple to move away from Intel chips. The real problem, ultimately, is that while Apple's chip teams deliver new chips like clockwork year in and year out, Intel's execution has been spotty, at best.
That's not a problem with Intel's chip-development teams -- those teams are fully capable of designing increasingly more powerful and efficient products on an annual basis. The problem, instead, lies in the fact that Intel's manufacturing group seems to be having severe difficulties bringing new manufacturing technologies into production, which ultimately leads to significant product delays and even outright product cancellations.
Apple, on the other hand, relies on Taiwan Semiconductor Manufacturing Company (NYSE:TSM) to manufacture its chips. TSMC's execution has, like Apple's, been like clockwork -- it delivers new chip manufacturing technologies at a faster rate than Intel does and delivers those technologies on schedule to meet its customers' needs. Apple's key manufacturing partner ultimately doesn't slow down the innovations that Apple's chip teams create, while Intel's internal manufacturing operations do.
At this point, it probably makes sense for Apple to swap Intel out of the 12-inch MacBook. Should Intel's execution with respect to higher-performance processors also continue to deteriorate thanks to manufacturing-related issues, then Apple might, indeed, be making the safe call by switching entirely away from Intel.