According to a CNET report today, NVIDIA (Nasdaq: NVDA) is losing whatever toehold it still has in Apple (Nasdaq: AAPL) systems. This will hurt.

Apple replaced NVIDIA graphics in most of its iMacs earlier this year, opting instead for chips by Advanced Micro Devices (NYSE: AMD). Now, sources indicate the next wave of low-end Macbooks will be powered by Intel (Nasdaq: INTC) processors with improved graphics capabilities built in, which would make an additional NVIDIA chip entirely superfluous.

Thin and light notebooks such as Apple's ultra-svelte designs don't have any room to waste on needless chips, so an all-in-one Intel solution would fit the bill perfectly. Previously, main processors have not come equipped with graphics-crunching features, and the built-in graphics in system chipsets have never been powerful enough to do the heavy lifting in multimedia-heavy-use cases. Intel's Sandy Bridge architecture changes all that, making integrated graphics a real alternative for Apple.

AMD's Fusion products have even more graphics power than Intel's latest and greatest, but Apple has a long-standing agreement with Intel and is not likely to replace the very core of its computers with a rival supplier on short notice. You'll still find AMD graphics in most high-end Macs, though.

So Apple gets some more design headroom than before, and AMD is largely watching this commotion from the sidelines, unaffected. But if CNET's sources are correct, NVIDIA is losing a very attractive contract here, not only in terms of direct sales, but also in the prestige that comes with being a key Apple supplier.

NVIDIA is in the process of becoming a mobile processor powerhouse, assuming its hopes for the Tegra processor are realistic. There's also a push into big-iron server systems and supercomputing by way of the Tesla product line. Meanwhile, its bread-and-butter graphics technologies are in danger of becoming irrelevant. AMD has been wiping the floor with NVIDIA's graphics products recently, whether you're looking at performance, efficiency, or sales, and the OEM design wins are few and far between.

Can NVIDIA still save its once-dominant graphics products, or should the company just resign itself to a future in mobile and server computing instead? Discuss in the comments below.