Apple is Planning to Use Its Own Chips In Macs Instead of Intel Chips

On Monday, Bloomberg reported that Apple Inc plans to make use its own chips in Mac computers starting as early as 2020. It will replace processors from Intel Corp. The report cited people who are familiar with the matter.

The shares of Intel were down by 7.6 percent at $48.10. The tech-heavy Nasdaq was also down by 3.6 percent.

According to the report, the initiative is code-named Kalamata, it is still in the early developmental stages. However, it is part of a larger strategy to make the family of devices of Apple work more similarly and seamlessly together.

Intel and Apple both refused to comment.

The Mac plays a small part in the overall financial picture of Apple, with sales of 19.2 million units in 2017. It accounted for 11 percent of the $229.2 billion in revenue of Apple for fiscal 2017.

However, while the desktop and laptop computer market has been in a years-long decline amid the rise of smartphones, the sales of Macs increased by 4 percent last year. According to data from IDC, a research firm, the growth in the sales came even as sales of PCs slightly dropped to 259.5 million units, the smallest decline since 2011.

For its part, Intel still depends on the sale of PCs for slightly more than half of its revenue, even though the chipmaker is striving to make more of its money from developing markets such as data centres. Intel does not unveil how much of its revenue comes from Apple. However, it reported that its PC segment generated $34 billion last year. It is up by 3.3 percent from the year before on the strength of higher sales of high-end gaming computers and notebooks.

However, for the past few months, Intel has been dealing with the reputation fallout from the chip design flaws of Spectre and Meltdown, which affected almost every modern computing device.