Apple and Intel mulling partnership regarding A-series processor production

Apple and Intel are reportedly discussing a partnership whereby Intel would manufacture chips for the iPhone and iPad.

Apple has for a while now been in a thorny predicament given its relationship with Samsung. On one hand, Samsung supplies all of the processors that power Apple's wildly profitable lineup of iOS devices. And yet, on the other hand, Samsung has quickly emerged as Apple's chief competitor in the smartphone space. What's more, Apple has accused Samsung of "slavishly copying" Apple's own products and innovations instead of coming up with its own. Consequently, the two companies are currently engaged in a slew of intellectual property lawsuits across the globe.

That said, it's no secret that Apple is actively seeking to lessen its reliance on Samsung. It's been rumored for a while that Apple is hoping to move its AX processor production to TSMC sometime in the near future. And now comes word from Reuters that Apple has also engaged in discussions with Intel whereby they would become a significant supplier of Apple's A-series processors.

A source close to one of the companies says Intel and Apple executives have discussed the issue in the past year but no agreement has been reached.

With PC sales slumping, it is the post-PC era after all, Intel has a strategic interest in playing a bigger role in the production of chips for mobile devices like the iPhone and the iPad. Looking back, Intel underestimated or perhaps miscalculated just how popuplar mobile devices would become and now it seems that they are more willing to adjust their strategy midstream.

The report also relays that Intel VP and general manager of Intel custom foundry Sunit RIkhi recently told Reuters that "his group is ready to take on a potential large, unidentified mobile customer, although he declined to discuss Apple specifically."

Making Apple's chips however would come at a price for Intel. Such a move could be seen as a capitulation of Intel's own smartphone and tablet chip designs, which are gradually becoming more efficient but have yet to be accepted for use in any major devices.

Complicating a possible deal is that the iPhone maker designs its mobile chips with technology licensed from ARM Holdings. ARM's architecture competes against Intel's and is ubiquitous in mobile gadgets, where Intel's own technology has not caught on.

But with the proliferation of mobile devices still exploding, and Intel's marketshare in the smartphone market standing at only 1%, it may very well be worthwhile for Intel to strike a deal with Apple, even at the expense of its own Atom mobile processor.

via Reuters

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