Intel has struggled to adapt its chip manufacturing operation to the new world of mobile devices, but help could be coming from an unlikely source: Apple and the iPhone.
Over the last year, both companies have been in talks that would result in Intel producing chips for Apple's mobile devices (the iPhone and iPad), though as of now, the negotiations have yet to bear fruit.
Intel has been trying to expand its presence in the mobile arena, and a deal with Apple would allow it to gain a major foothold almost immediately. The company recently announced it will start manufacturing chips designed by Altera, widely seen as Intel's first big move in the field. Getting Apple onboard, though, is what many analysts are waiting to see.
"If you can have a strategic relationship where you're making chips for one of the largest mobile players, you should definitely consider that. And for Apple, that gets them a big advantage," Pat Becker Jr. of Becker Capital Management, said to Reuters, which reports that it owned $39 million worth of Intel shares by the end of 2012.
For Apple, the move makes sense as the company tries to remove itself from a complicated relationship with Samsung. Apple gets many of its iPhone and iPad components from the South Korean company, but over the past few years Samsung has morphed from small-fry in the mobile field to world beater. The company's Galaxy S line-up is consistently outselling the iPhone across the world, and Samsung is going to make a play against the dominant iPad with its new Galaxy Note 8.0.
Intel's motivation is a little more complicated. The company has been trying to push its Atom and x86 processors (not to mention that Altera deal), and a deal with Apple will surely challenge or weaken its ability to do so. However, the bread and butter of Intel's business has traditionally been PCs, and that market contracted in 2012 and is expected to do so again this year. Intel might decide that partnering with Apple is necessary to boost profits.
Either way, any decision on the matter won't be made until a new CEO is in place. Paul Otellini is leaving Intel in May, and a replacement should be announced relatively soon.
