Apple and Intel have been in talks over the past year to discuss a contract manufacturing arrangement, Reuters reports, citing a source close to one of the companies. Apple obtains chips and other components for the iPad and iPhone from Samsung but Apple has been seeking to reduce reliance on its arch rival. Apple could also make use of Intel's leading process technology to make better chips for its mobile devices. As for Intel, it's the world top manufacturer of chips for PCs, but PC sales are slowing down so Intel plants have been operating at less than full capacity. Although both parties would stand to gain from a "foundry" arrangement, no agreement has been announced so far.
What Else You Need To Know
- In the end it could be a business-model question for both: Intel would have to cut its industry-leading 60% gross margins in order to do business with Apple, and profit-loving Apple won't likely be able to strike an arrangement that would be cheaper than its current supply deal with Korea-based Samsung.
- Current Intel CEO Paul Otellini is planning to retire this May, making an Apple/Intel alliance still uncertain.
- Apple and Samsung are competing in the mobile arena, and have asserted patent infringement claims against each other in more than a dozen courtrooms around the world.
- Intel in the past struggled to woo device-makers because while Intel chipsets are powerful, they're power-hungry, making them a bad fit for battery-powered mobile devices.
- Intel is now producing chips for Windows 8-running tablets but its market share is still at 1% as the mobile arena is still dominated by Android and Apple devices.
Other sources
An Apple/Intel fab deal, if it ever comes to pass, could be a huge win for everyone.- Rene Ritchie, iMore
The potential of the deal is huge for Intel, as its chip manufacturing technology is “at least two years ahead” of Taiwanese foundry TSMC or Samsung.- István Fekete, iPhone in Canada Blog
- Other
- Intel has been in discussions to produce Apple chips, reports Reuters
- Apple Insider
- Rumor: Apple and Intel again mulling partnership to build A-series chips
- Electronista
- Intel seeking slice of Apple chip fabrication business
- Business Insider SAI
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Intel Might Start Manufacturing Mobile Chips For Apple (INTC, AAPL)
Such a move may also offer a backdoor of sorts into large-scale production of chips for mobile devices, where Intel has made little headway after underestimating the impact of the iPhone and iPad and falling behind more nimble rivals.
- iPhoneNess
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Intel To Make Apple Chips? NUU MiniKey for iPhone 5 Debuts
If you can have a strategic relationship where you’re making chips for one of the largest mobile players, you should definitely consider that.
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- Digital Trends
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- iPhone Download Blog
- Apple (again) mulling shifting production of iPhone and iPad chips to Intel
- Apple Insider
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