Intel Corporation to Lose Apple Inc.’s Mac?

Ming-Chi Kuo from KGI Securities issued a very interesting report (via MacRumors) detailing predictions about where Apple (AAPL -1.22%) will have various chips for various products built along with predicted order allocations. While the portions pertaining to the Apple Watch, iPhone, iPad, and cellular baseband are worth discussing in a separate article (stay tuned), there's one familiar prediction worth exploring.

Stop me if you've heard this one already
The report makes the following claim:

Apple may launch Mac products that use own AP in next 1-2 years. This prediction is based on the assumption that Apple's self-developed AP performs at a level between Intel's Atom and Core i3 and is good enough for Mac. Using self-developed AP can help Apple better control the timing of Mac launches and Mac product features.

Notice that Kuo doesn't cite any "supply chain checks," or any of the other usual tell-tale signs of knowing something that outsiders might not, but it is a prediction. That prediction is based on Apple developing an applications processor that "performs at a level between Intel's (INTC -2.40%) Atom and Core i3 and is good enough for Mac."

Let's take a closer look to see what Apple would need to build to kick Intel out of the Mac.

What kind of performance would Apple need?
One test that I believe represents processor and graphics performance is 3DMark Unlimited. This test runs on PC hardware, as well as mobile hardware, and offers a "physics" sub-score (CPU performance), as well as a graphics sub-score (GPU performance). In the table below, I have provided the sub-scores for the Core i5-4300U found inside of the Surface Pro 3, as well as the Apple A8X found inside of the iPad Air.

Source: AnandTech, Primate Labs.

As you can see, the older Haswell-based Core i5-4300U is 74% faster than the A8X's custom PowerVR Series 6XT GPU. In this test, the dual-core Haswell chip is about three times as fast as the A8X in 3DMark Physics. Geekbench 3 paints a dimmer picture for Intel, though, with the triple-core A8X edging out the dual-core Core i5-4300U in multi-core performance.

In terms of graphics, the A8X is significantly behind the Haswell chip, but Imagination's (NASDAQOTH: IGNMF) PowerVR Series 7 can be had in even larger configurations than what was found on the A8/A8X. Apple has access to graphics IP that would allow it to scale up to Haswell-like graphics performance. Apple could also design its own graphics processor for this level of performance.

Will Apple actually do it?
I do think Apple could build a chip that delivers good MacBook Air-level performance. While I think that such a MacBook Air-level chip could be built with IP that scales from smartphones to low-power laptops, I'm not convinced that Apple could get that kind of leverage for higher-performance Macs such as the MacBook Pro/iMac/Mac Pro. I believe it would need to develop separate graphics and CPU IP at the very least, which takes both money and manpower.

Apple could afford to do so, but I continue to wonder if the return on investment would be worth it. A point that I -- and I believe others -- have made in the past is that Mac volumes are absolutely tiny relative to iPhone/iPad volumes. I still believe that it would make more sense to let Intel worry about developing the best PC chips, while Apple crafts chips best suited for its lucrative iPhone/iPad lines.

We'll know in due time what Apple ultimately ends up doing.