Should Apple Save Intel by Adopting the Atom?

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Photo by Michael Kwan (Freelancer) - http://flic.kr/p/69b8kQ
Photo by Michael Kwan (Freelancer) - http://flic.kr/p/69b8kQ

Should Apple bailout Intel? That’s the thinking of one analyst who suggests the Cupertino, Calif. tech giant help the chip giant leap from aging PCs to the future of smartphones and tablets. Apple, which already uses Intel Core 2 Duo, i5 and i7 cores in laptops and desktops, could adopt Intel’s Atom core.

“In our view, Intel would pick up Apple’s volume, driving revenue growth at good (not great) gross margin,” Piper Jaffray analyst Gus Richard tells investors Monday morning. Meanwhile, “Intel would also benefit from becoming a key supplier in smartphones and tablets and drive growth,” he adds. But what’s in it for Apple, which reportedly is looking for an alternative to the Intel chips in its laptop and desktops?


Richard plays Apple’s well-known control-freak card. The company, which has a storied history for controlling its products, as well as the message, would “maintain control of its microprocessor architecture,” reasons the analyst. Recently, talk has risen about the possibility of Apple moving to the ARM architecture, possibly as soon as 2013 for the MacBook.

Last week, Richard again argued for the switch to Intel, writing the chipmaker “has no market share in the next wave of computing” and getting in on the tablet revolution would revive a dominance similar to that of Wintel and PCs.

But, again, what’s in it for Apple? After all, tablet users seem to be happy with ARM, Gartner analyst Michael Gartenberg said last month. There’s also that nasty rumor about Atom not being powerful enough for the iPhone or iPad. That’s one reason Apple reportedly rejected Intel.

In the end, the likelihood of an Intel-powered iPhone or iPad seems alive only in the minds of those hoping to save the sagging fortunes of PC chipmakers. Intel can survive in a post-PC world if it can develop mobile chips with real oomph. As for Apple and the Atom, well, the Atom chipset is connected in the public’s mind with low-powered, low-cost netbooks. We all know what happened to those, right?

[Barron’s]

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