Apple may use Intel chips

By ZDNN Staff, News.com
Posted on ZDNet News: May 23, 2005 2:10:00 PM

The Wall Street Journal, citing two industry executives with knowledge of recent discussions between the companies, reported that Apple will agree to use Intel chips.

Neither company would confirm the report, and an Apple representative told the Journal that the information should be characterized as "rumor and speculation."

It was unclear whether such a move would signal a large-scale shift away from chips made by IBM, Apple's longtime supplier, the article said.

Apple could choose to add some Intel-based models to its product line or make a complete shift to Intel's chip technology in what would be seen as a serious blow to IBM's chip business, the newspaper said.

Although Apple has never offered Intel chips inside its consumer-oriented computers, it does so in one of its other products--the Xserve RAID storage system.

Adopting Intel chips more broadly would help ensure that future Macintosh systems could meet the price and performance of products from tough rivals such as Dell.

Apple's pricing, which has often been higher than rivals, could become more competitive if Intel provides the kind of marketing subsidies it has given to other computer makers, the newspaper said.

Apple sells about 3 million computers a year--a small portion of the estimated 200 million sold globally.

But for Intel, winning over Apple would be a prestigious endorsement from one of technology's most influential trendsetters and could associate the chipmaker with Apple's hugely popular iPod music player.

Apple's shares have nearly quadrupled since the iPod was introduced in October 2001.

As recently as February, Apple Chief Financial Officer Peter Oppenheimer reiterated that Apple has no plans to offer Mac OS X on anything other than the kinds of chips it currently uses.

News.com's Ina Fried contributed to this report.