There's a lot of speculation these days that Apple (NASDAQ:AAPL) is going to dump Intel (NASDAQ:INTC) in its highly popular line of Mac products. The argument is that Apple's chip design teams will eventually build a line of processors that will offer similar performance and power as Intel's parts, but will be able to do so more economically. Here's yet another counterargument.
The Intel/Apple relationship seems good
In case you haven't noticed, Apple has been driving Intel's integrated graphics efforts hard. Since the introduction of Sandy Bridge in 2011, Intel has been much more serious about bringing competitive integrated graphics solutions to the market. To find an excellent example of just how Apple-driven Intel's chips are, look no further than Intel's Iris Pro graphics, first introduced in the 15-inch Retina MacBook Pro.
What Intel did here was develop a special chip that dedicated a substantial amount of area to a large graphics block. On top of that, Intel designed a special, fast-embedded memory chip in order to overcome memory bandwidth -- that's how much data the chip can haul back and forth from memory per second -- limitations of traditional notebook memory configurations. Going forward, Intel is likely to continue to be aggressive in pushing its graphics architectures in order to satisfy Apple's needs.
Where will Apple get a big, fat graphics processor?
For Apple's A-series chips, it licenses graphics IP from a company known as Imagination Technologies (LSE:IMG). There are plenty of low-power/mobile focused graphics IP vendors out there, but very few are willing to license higher-performance GPUs required for notebooks. Now, in this case, Apple would have a few options for beefy, high-end Mac-class graphics:
- License from NVIDIA or AMD. Both NVIDIA (NASDAQ:NVDA) and Advanced Micro Devices (NASDAQ:AMD) have high-performance graphics IP. NVIDIA has publicly announced its intentions to license such IP (and this would be a big win for that program), but it is not inconceivable that AMD would be willing to license its GPU technology to Apple for integration into a "big" A-series chip. It has done so in the past for game console chips designed by others.
- Roll its own. Apple has been hiring quite a few graphics processor designers, and several job listings have suggested that Apple is building a "world class" graphics IP team. Apple could simply develop its own.
- Pay Imagination to do it. Apple could simply pay Imagination, its current GPU IP partner, to build a "special" large GPU IP block for Apple's needs.
- License Intel's, fab at Intel. The final option would be to simply license the GPU IP from Intel, and then build that chip at Intel's Custom Foundry. If Apple really wanted to use its own designs in the Mac, Intel would probably vie for that foundry business anyway -- it's better than nothing.
However, all of this seems like a pretty big hassle for what amounts to about 20 million units per year of Mac shipments. Indeed, a CPU core that spans the iPad and Mac is possible, or a CPU core that spans iPad and iPhone is possible; but a core that spans high-end Mac, iPad, and iPhone would probably be very difficult to cost-effectively achieve, as these are all fundamentally different design targets.
Foolish bottom line
Make no mistake -- if Apple wanted to run far, far away from Intel, it could find a way to do so. Apple is a very rich, technically capable company; so where there's a will, there's a way -- even if it involves compromises. However, given the sheer amount of work that Intel seems to be willing to do in order to service Apple's needs, and given the very real structural advantages Intel has in developing high performance, PC-class processors, this still seems highly unlikely in the near-to-medium term.
Ashraf Eassa owns shares of Intel. The Motley Fool recommends Apple, Intel, and Nvidia. The Motley Fool owns shares of Apple, Imagination Technologies, and 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.
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