) brought Intel (NASDAQ:INTC) on board to supply chips for its Mac
notebooks ten years after running its own. Can we expect to see
Intel processors in next generation iPads or iPhones? We think not.
While Intel is the king of PC chips, the mobile market is much more
competitive and since Apple has designed its own chips for the
iPad, we don't see Intel getting a piece of this market anytime
Our price estimate for Intel stands at $27.50
, implying nearly 30% upside.
If we look back, Apple had its laptop for nearly 10 years before
moving to Intel chips with the MacBook Pro. During this growth
period for Apple, Mac sales implied a missed opportunity for Intel
So will we see the iPhone 5 or iPad 3 have
The PowerPC processor was created by an alliance between Apple,
IBM and Motrola (
) while Apple's current iPhone and iPad processors are its own. As
such, we think that Apple is likely to continue with its own
processors because they are performing well and allows Apple to
earn higher margins on these devices.
Though Intel is far and away the leading chip maker for the PC
market, it's not nearly as dominant in the mobile chips market.
Therefore there is little incentive for Apple to shift to Intel
until its chips can show much better performance.
Even if Apple shifts to third party-processors, there is no
guarantee that Intel would gain this business given the formidable
competition in mobile chips from other ARM-based players like
Nvidia (NASDAQ:NVDA), Qualcomm (NASDAQ:QCOM) and Texas Instruments
Do you think differently? Let us know by commenting in the box
See our complete analysis for Intel's stock