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Apple plans to move away from Intel chips

Aims to use its own chips in Macs from 2020.
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Apple Inc. plans to move away from Intel chips in Mac computers in the next three years.

Apple Inc. plans to move away from Intel chips in Mac computers in the next three years.

Apple might be looking to make the biggest change seen in Mac computers in a while. According to reports, the company will be moving away from Intel chips on Macs, in favour of its own chips. And the move may be put in action as early as 2020. The company will most likely bring the change to its 12-inch Macbook first, Bloomberg reported.

“The initiative, code named Kalamata, is still in the early developmental stages, but comes as part of a larger strategy to make all of Apple’s devices -- including Macs, iPhones, and iPads -- work more similarly and seamlessly together,” inside sources told the New York headquartered new agency on condition of anonymity.

Intel's shares plummeted as much as 7.6 percent to $48.12 after the news.

Intel's shares plummeted as much as 7.6 percent to $48.12 after the news.

Apple accounts for about 5 percent of Intel’s annual revenue right now, the publication estimated. The company also uses Intel’s modems in some of its iPhones, though it’s unlikely that those will be dropped just yet. The chip maker’s shares plummeted as much as 7.6 percent to $48.12 . Nonetheless, the move will be consequential for both Intel and Apple, as was seen by the hit on Intel’s stock prices soon after Bloomberg published its report

The report illustrates the benefit the iPhone maker could accrue as a result of producing its own chips. “Apple would be able to more tightly integrate new hardware and software,” the report noted, “potentially resulting in systems with better battery life -- similar to iPads, which use Apple chips.” And when Apple's dream turns into reality, the Mac computer line could perhaps have a similar processor strategy as that of the iPhone and iPad.

This would be the first time since 2005, that Apple has made a processor switch for its Mac computers. The company last made such a decision when it moved from IBM’s PowerPC chips to Intel’s processors over a decade ago. It’s unlikely that Apple will overhaul all Mac computers at the same time, but it should still make significant changes in important ones.

Industry pundits doubt whether the Cupertino, California-based company would be able to achieve this objective in the next few year. Summit Insights group analyst Kinngai Chan told Reuters, "while it’s possible that Apple may replace Intel in some of its lower-end product lines, we think it will be difficult for Apple to completely replace Intel by 2020, especially on its higher-end offerings.” 

From a tech point of view, while Apple has never really disappointed with its own alternatives for performance, buyers will be interested in understanding how big a difference this change might bring. Apple declined to comment on the report, while Intel told Bloomberg that they “don’t comment on speculation about our customers.”