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Intel faces strong pressure from both AMD and ARM, both of which would like to put their rival CPU products in Apple's MacBooks. Apple, the fourth largest PC seller in the U.S. currently uses Intel chips exclusively in its notebook line.  (Source: Apple)
Company faces growing pressure from ARM and x86 rival AMD

Apple, Inc. (AAPL) is a gleaming target for semiconductor firms.  It makes the world's best selling tablet -- the iPad -- and controls a major chunk of the smartphone market with the iPhone.  

And while Apple's personal computers -- iMacs and MacBooks -- still trail industry giants Dell Inc. (DELL) and Hewlett-Packard Company (HPQ) in sales, in Q1 2011 they posted 9.6 percent growth, while competitors overall saw a 10.7 percent sales decline.  Apple currently sits in fourth place in PC sales in the U.S.

I. Intel Feels Pressure to Try to Cling to MacBook Position

The world's biggest chipmaker, Intel Corp. (INTC), delivered comments at the Reuters Global Technology Summit in New York on Wednesday indicating that making sure Apple continued to use its CPUs in their MacBooks was a critical objective.

Intel is under pressure from two sides.  On the x86 architecture side, it faces a surging Advanced Micro Devices, Inc. (AMD) whose power savvy Fusion GPU+CPU chips are seeing strong pickup among other PC makers.  Apple recently switched many of its MacBooks from using NVIDIA Corp. (NVDA) graphics cards to using AMD cards, so the pair already have a growing relationship.

To make matters worse, it also faces pressure from ARM.  ARM Holdings plc (ARMH) is preparing to next year launch a new design which will feature up to 16 cores, clocked at up to 2.5 GHz.

The chief advantage of ARM cores is that they're more efficient than rival x86 designs.  For that reason, tablets and smartphones have almost exclusively used ARM where battery life is of utmost importance.

Intel has a couple advantages.  First, its current CPU architectures are conducive for higher clock speeds than ARM, making them a better fit for high performance laptops like the MacBook Pro line.  Secondly, Intel enjoys a healthy lead in manufacturing processes, which helps mitigate some of ARM's architectural power efficiency advantages and AMD's GPU design advantages.

II. Could ARM Give Intel the Boot?

Intel senior vice president Tom Kilroy addressed the media commenting, "We work very closely with them [Apple] and we're constantly looking down the road at what we can be doing relative to future products. I'd go as far as to say Apple helps shape our roadmap. Apple -- they push us hard."

But he refused to confirm that Intel, who makes around 80 percent of the world's CPUs, has received any assurance from Apple of long term MacBook exclusivity.

Intel scored a win earlier this month when Google Inc. (GOOG) announced that the first Chrome OS notebooks from Taiwan's Acer Inc. (2353) and South Korea's Samsung Electronics Co., Ltd. (005930) would feature Intel Atom chips.

However, Intel faces pressure on that front too.  Many commenters, including some here at DailyTech complained that the $350-$500 price range for the early "ChromeBooks" was too expensive -- they were hoping for $200 designs.  While part of the problem is the large screens used, another obstacle is the Atom chip, which remains pricier than lower clocked, but power-savvy ARM alternatives.  Google may opt to release ARM ChromeBooks in the near future, and when it does, they may be cheaper than the Intel models.

The world's largest OS maker Microsoft Corp. (MSFT) has already committed to support ARM with its next version of Windows, a sign that the tide may be turning against Intel.  Intel has blasted the decision saying that the Microsoft and ARM will be delivering customers a substandard experience.

In the face of uncertain times with Microsoft and Google, Intel clearly wants to hang on to its Apple foothold.  However, with Apple saying that its upcoming version of OS X, OS X "Lion" (10.7) will be more "iOS-like", it is questionable whether it will be able to dissuade Apple from launching ARM powered models.  

Apple hasn't seemed overly concerned in the past about adopting slight slower hardware to pursue its goals of attractive battery life and ultra-portable design.  And Apple is relentless in ever trying to expand its profit margin.  Thus the cheaper, more power efficient ARM designs may give Intel significant grief over the next year in Apple offerings, much as they are doing with Windows PCs.

That's concerning as Intel has had virtually no success, thus far, in trying to counter-attack ARM's holding in the tablet and smartphone sector.





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