Intel CEO says relationship with Apple remains positive, companies are growing 'closer'

Posted:
in General Discussion edited February 2014
Intel Chief Executive Brian Krzanich, who has served as head of the chipmaker for less than one year, was asked on Wednesday about his company's relationship with Apple, and responded that the two parties continue to "grow closer" as time progresses.

Intel
Intel CEO Brian Krzanich shows concept devices running new Quark CPUs. Image via ABC News.


Krzanich took part in an Ask Me Anything question-and-answer session on Reddit, in which he was asked about a range of subjects related to his position at Intel, where he has been CEO since last May. One user asked Krzanich how close Intel's relationship is with Apple, and if it has changed since the company moved its Mac lineup to Intel processors nearly a decade ago.

"We've always had a very close relationship with Apple and it continues to grow closer," Krzanich shared. "Sure (it's) grown close over the years, especially since... they started to use our technology in their systems."

"We've always had a very close relationship with Apple and it continues to grow closer." - Intel CEO Brian KrzanichThe CEO went on to explain that Intel is always trying to forge a closer relationship with its partners. He shared a bit of advice from former Intel Chief Executive Paul Otellini, who told him that the company wins when its end customers win.

Intel is the largest semiconductor maker in the world, providing the central processors found in most Windows PCs as well as all of Apple's Macs. But while Intel is the exclusive chipmaker for the Mac, the company has had a sometimes contentious relationship with Apple.

That's largely stemmed from the fact that Apple uses ARM-based processors, and not Intel silicon, for its wildly popular iPhone and iPad lineups. Otellini revealed last year as he exited Intel that his company had the opportunity to be a part of Apple's first iPhone, but that he decided against moving forward with what would have been a winning bid.

Spurned by Intel, Apple instead turned to Samsung, which has built all of the processors for Apple's iPhone and iPad to date. But Samsung has also in the subsequent years become a major competitor to Apple, which has fueled speculation that the iPhone maker is looking to move its chip production away from Samsung.

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Apple's SVP of worldwide marketing Phil Schiller introduces the A7 system-on-chip.


And with ARM-powered smartphones, tablets and other devices flooding the market, Intel partner Altera will begin manufacturing third-party ARM chips this year. Industry watchers view the move as a major decision, as Intel's own Atom chips are intended to compete with ARM-based processors like Qualcomm's Snapdragon and Apple's A-series CPUs.

That's helped to fuel speculation that Intel could begin building custom ARM chips for Apple in the future, as the Cupertino, Calif., company looks to lessen its reliance on competitor Samsung.

Beyond Apple, Krzanich was also asked on Wednesday whether he uses any wearable technology, an emerging market many expect to see significant growth this year. In response, the Intel CEO revealed that he currently uses two devices, one of which is an internally developed Intel device that he can't disclose any more details about.

The fact that Krzanich wears the device apparently on a daily basis may suggest that Intel has a near-finished wearable device it could launch this year. Numerous rumors have suggested Apple will launch a wrist-worn, fitness and health focused "iWatch" this year.

On the wearable front, Intel has invested in heads-up display maker Recon Instruments, and is also sponsoring an innovation challenge to bring wearable technology to life over the next year. Last year, the company also announced the Quark, an embedded processor that it hopes will fuel the next generation of wearable devices.
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Comments

  • Reply 1 of 51

    2016: Custom Intel graphics chip puts Macs on the forefront of integrated computing. (happening)

     

    2018: Apple buys Intel; all chips designed and manufactured in-house. All deals with other companies terminated. (wishful thinking)

  • Reply 2 of 51
    want to see Intel succeed, but they've missed the mobile boat.
    they should buy ARM; license their IP and handle manufacturing for customers, a one stop shop for reference and custom ARM processors.
  • Reply 3 of 51
    Quote:
    Originally Posted by Tallest Skil View Post

     

    2016: Custom Intel graphics chip puts Macs on the forefront of integrated computing. (happening)

     

    2018: Apple buys Intel; all chips designed and manufactured in-house. All deals with other companies terminated. (wishful thinking)


     

    Apple buying Intel won't happen.  Apple has no desire to make money on everyone else's mainline chips (and ceasing production is stupid for a zillion reasons).  What Apple can do is have Intel build it's A-class ARM chips instead of Samsung.  I'm sure Apple would love that but Intel still would have to get over being just a chip-fab for a competitor's technology.

  • Reply 4 of 51
    Originally Posted by Sevenfeet View Post

    Apple has no desire to make money on everyone elses mainline chips






     All deals with other companies terminated.


     

    And?

     

    (and ceasing production is stupid for a zillion reasons)


     

    How about just one? They’ve done it for all their other component companies.

     

    Again, wishful thinking, but come on.

  • Reply 5 of 51
    sockrolidsockrolid Posts: 2,788member
    Quote:
    Originally Posted by Tallest Skil View Post

     

    2016: Custom Intel graphics chip puts Macs on the forefront of integrated computing. (happening)

     

    2018: Apple buys Intel; all chips designed and manufactured in-house. All deals with other companies terminated. (wishful thinking)


     

    Interesting.  

    Even more interesting: change the years and (roughly) substitute "ARM" for "Intel."

    You get this (which for various reasons is likely impossible, but whatever):

     

    2015: Apple buys ARM; all chips designed and manufactured in-house.  All deals with other companies terminated.

     

    2017: Custom ARM chips put Macs on the forefront of integrated computing.

  • Reply 6 of 51
    nagrommenagromme Posts: 2,834member
    Macs going ARM is an absurd idea. So Intel (and AMD?) will have a long future with Apple.

    Intel may or may not ever get big in mobile; but a (limited) market for high-power desktops will remain in some form.
  • Reply 7 of 51
    nagromme wrote: »
    Macs going ARM is an absurd idea.


    Why?
  • Reply 8 of 51
    Quote:
    Originally Posted by Tallest Skil View Post

     

     

    And?

     

    How about just one? They’ve done it for all their other component companies.


    It is true...they have terminated agreements with other companies after acquisitions.  The most important one I can think of was PA Semi which was doing stuff for the military.  And that gets into the heart of why you just don't buy Intel's business to shut it (mostly) down.  First, you'd throw a tremendous number of people out of work in the United States during a period where Apple has pledged to bring jobs back to these shores.  Second, products with Intel chips have a tremendous amount of dollars that go straight into the country's trade deficit due to exports.  There's national security interests as well. And of course there's the immediate impact to the bottom line of thousands of companies that depend on these chips, big and small.  I could go into further detail, but you get the idea...it would be crazytown.  The Justice Department wouldn't allow it.  People would be at Apple's doorstep with pitchforks.

  • Reply 9 of 51
    Originally Posted by Sevenfeet View Post

    First, youd throw a tremendous number of people out of work



    WHY? :???: Apple still needs them.

     

    The Justice Department wouldn't allow it.


     

    They allow absolutely everything else. Why not this?

  • Reply 10 of 51
    Quote:

    Originally Posted by Tallest Skil View Post

     



    WHY? :???: Apple still needs them.

     

    They allow absolutely everything else. Why not this?


     

    You're implying that Apple-owned Intel would terminate all agreements except for that Apple needs.  That's silly.  First, just think about how many fab plants, operations, R&D and everything else Intel spends money on.  Apple's piece of the customer pie is small (despite the fact they are one of Intel's single biggest customers).  If you shut down all that stuff, then the cost to produce what Apple needs would skyrocket just due to the fact that Intel's profits are dependent on the scale of operations.  Reduce that scale and cost of doing business is thrown out of whack.

     

    Again, that's just one reason why that proposal is silly.  I've got all night.  Tip your waitress...

  • Reply 11 of 51
    Quote:

    Originally Posted by Sevenfeet View Post

     

     

    You're implying that Apple-owned Intel would terminate all agreements except for that Apple needs.  That's silly.  First, just think about how many fab plants, operations, R&D and everything else Intel spends money on.  Apple's piece of the customer pie is small (despite the fact they are one of Intel's single biggest customers).  If you shut down all that stuff, then the cost to produce what Apple needs would skyrocket just due to the fact that Intel's profits are dependent on the scale of operations.  Reduce that scale and cost of doing business is thrown out of whack.

     

    Again, that's just one reason why that proposal is silly.  I've got all night.  Tip your waitress...


    There's better things I can think of to do my waitress.

  • Reply 12 of 51
    Quote:

    Originally Posted by nagromme View Post



    Macs going ARM is an absurd idea. So Intel (and AMD?) will have a long future with Apple.



    Intel may or may not ever get big in mobile; but a (limited) market for high-power desktops will remain in some form.

    At the very least, the MBA line going ARM is not absurd.  I welcome it.

  • Reply 13 of 51
    Originally Posted by Sevenfeet View Post

    First, just think about how many fab plants, operations, R&D and everything else Intel spends money on.


     

    And why wouldn’t Apple need those?

  • Reply 14 of 51
    Quote:
    Originally Posted by Tallest Skil View Post

     

     

    And why wouldn’t Apple need those?


     

    They would, just not as many.  According to Gartner and reported on this website, Apple now has a market share of 13.7% in the Intel PC space.  So that means that 86.3% of Intel's products are sold to other companies.  Intel might have 10 fab plants producing that.  Apple might barely need one of those plants, and I doubt all of what Apple's buys are made in the same place anyway.

     

    Intel's chips may not be in phones or tablets, but they pretty much are everywhere else.  Business PCs (and servers), home PCs, cash registers, vending machines and kiosks, dedicated medical equipment, automotive, aviation, defense, space exploration...this is so obvious I shouldn't have to list it.

     

    Seriously, read a book on Economics, specifically operations.  This isn't rocket science, just MBA stuff.

  • Reply 15 of 51
    Originally Posted by Sevenfeet View Post

    Seriously, read a book on Economics, specifically operations.  This isn't rocket science, just MBA stuff.


     

    I’m really not sure what part of wishful thinking was unclear, but you realize that in a world where Intel doesn’t serve any company but Apple that Apple would grow as a company, right?

  • Reply 16 of 51
    mstonemstone Posts: 11,510member
    Quote:

    Originally Posted by CanukStorm View Post

     
    At the very least, the MBA line going ARM is not absurd.  I welcome it.


    I don't see that happening. Complete waste, and for what? So Apple could save a few dollars designing their own chip and the end user gets an extra hour of battery life out of a dumbed down MBA? People buy Airs to get a real Mac that runs Mac software, or sometimes Windows too. Sure Windows 8 can run on ARM, but probably not on custom made Apple A-Series chips. How many years before you would get Adobe CS on ARM? Or any of the premium titles that business users need like Office, Intuit, AutoDesk, for that matter? And what about games? A Mac Book Air on ARM would be a crippled disaster. The sales numbers just don't justify the investment for developers, and Mac sales are shrinking anyway so you would probably never get any third party software.

  • Reply 17 of 51
    Quote:

    Originally Posted by Tallest Skil View Post

     

     

    I’m really not sure what part of wishful thinking was unclear, but you realize that in a world where Intel doesn’t serve any company but Apple that Apple would grow as a company, right?


    Uh, no.  Let's just play your game that Intel just disappeared tomorrow.  What would happen?  Outside of panic in the tech world and a huge stock market crash (I wish I were kidding), the most immediate winner would be AMD since everyone would flock to them to get their chips.  Since AMD doesn't have Intel's fab capacity (or depth of products, or performance), chip prices would skyrocket until market forces equalized, probably in two years.  Not to mention every body who owned a chip fab would probably get into the business and virtually all of those companies are in China, Taiwan or Korea.  Not good for the country's GDP.

  • Reply 18 of 51
    tjwaltjwal Posts: 404member
    Quote:

    Originally Posted by CanukStorm View Post

     

    At the very least, the MBA line going ARM is not absurd.  I welcome it.


    The A7 has about 50% the computing power of the Macbook air core I5.

     

    The Arm processors are are great mobile chips (phone/tablet) because they don't consume much power.  If you're willing to pack around a one pound battery then the ARM looses that advantage.  Of course if you want a Macbook air that can go a week without recharging then I suppose an ARM chip might be appropriate but you will have to give on performance.

  • Reply 19 of 51
    mstonemstone Posts: 11,510member
    Quote:

    Originally Posted by Sevenfeet View Post

     
    Uh, no.  Let's just play your game that Intel just disappeared tomorrow.  What would happen?  Outside of panic in the tech world and a huge stock market crash (I wish I were kidding), the most immediate winner would be AMD since everyone would flock to them to get their chips.  Since AMD doesn't have Intel's fab capacity (or depth of products, or performance), chip prices would skyrocket until market forces equalized, probably in two years.  Not to mention every body who owned a chip fab would probably get into the business and virtually all of those companies are in China, Taiwan or Korea.  Not good for the country's GDP.


    Not to mention that Apple has already made it very clear that they don't want to own ANY factories.

  • Reply 20 of 51
    Quote:
    Originally Posted by mstone View Post

     

    Not to mention that Apple has already made it very clear that they don't want to own ANY factories.


    A legacy of Tim Cook, who eliminated Apple's owned factories by early 2000s.  Other providers were better at it and it gives Apple more flexibility to adjust for product/market shifts.  Even the new Sapphire plant in the US is owned by someone else (same for the Mac Pro plant).

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