Intel to consumers: 'Go PC!' - Intel to Apple: 'Good God do we need your business!'

AppleInsider

While Intel attempts to convince consumers that its processors are superior to the design of Apple Silicon, the chipmaker is also jockeying to build Apple's custom processors, leaving the company's CEO talking out of both sides of his mouth.

Intel's about-face came in an announcement on Tuesday when the Silicon Valley stalwart said it would invest some $20 billion to build a pair of chip fabs in Ocotillo, Arizona. Intel Foundry Services, Intel's new chip manufacturing arm, will produce ARM designs like those used in Apple's A-series processors found in the iPhone and iPad, as well as the M-series SoC found in the latest Macs.

Appearing on CNBC on Wednesday, Intel CEO Pat Gelsinger admitted that his company was unable to meet the needs of Apple, which is why it has decided to design its own processors and move away from Intel for its Mac lineup.

"Largely because we didn't meet their needs, they've gone a different direction for the M1 platform. We need to build better products," Gelsinger said. "But I've also said we want them to be a customer of foundry, because they depend heavily on TSMC today, they want a second foundry."

Apple currently relies on TSMC for its processor manufacturing, but previously worked with another competitor -- Samsung -- for a significant portion of its chips. Working with Intel again would not be unprecedented.

It is, however, awkward, considering Intel recently launched a poorly thought out ad campaign disparaging Macs as inferior to Windows PCs. Among the arguments Intel has attempted to make in its "Go PC" campaign is that USB-C and Thunderbolt dongles are inconvenient for consumers -- even though Intel itself is a board member of the USB Implementation Forum, and the company created the Thunderbolt spec with the USB-C connector.

Apple remains a relatively niche player in the PC space, with the Mac commanding 15 percent or less of domestic computer sales. But now that both the Mac and iPad share a common architecture, as well as the iPhone, the loss of Apple's business is particularly painful for Intel as the PC industry as a whole begins an inevitable transition.

Apple's M1 chip, its first custom Mac processor, offers superior performance and less power draw than Intel's processors, meaning Apple can make laptops that are thinner, lighter, and more powerful, all while giving users longer battery life to boot. It's expected that Apple will debut more powerful custom processors this year, expanding its lineup of ARM-based Macs to high-end MacBook Pros, iMac desktops and more.

Microsoft's Surface hardware also runs on ARM chips instead of Intel, and Windows on ARM devices are growing in share. Following Apple's lead, the PC landscape is changing.

Intel remains a part of Apple's business for now, which Gelsinger noted on Wednesday, but the clock is ticking until all Intel CPUs are inevitably phased out of the Mac lineup. Given how much more capable Apple Silicon is than Intel's current offerings, it's reasonable to believe that the writing may also be on the wall for the legacy x86 architecture, which has powered Windows PCs for decades but seems to run too hot and consume too much power for the next generation of thin and powerful computers.

Justin Long wants you to know Intel still makes processors

Intel's ARM foundry play may ultimately win Intel some of Apple's business, as the Mac maker looks to diversify its supply chain and reduce reliance on TSMC, particularly during an ongoing industrywide chip shortage. But its very public "Go PC" campaign could also hurt its chances of wooing Apple, particularly if its new foundry isn't up to snuff.

"Intel doesn't compete with Apple -- the PC ecosystem competes with Apple," Gelsinger said to CNBC, attempting to distance his company from the Mac-versus-PC spat. Except Intel itself has bankrolled the "Go PC" ads starring former "Get a Mac" actor Justin Long.

That leaves Gelsinger talking out of both sides of his mouth -- praising Apple in hopes of earning their business, but also disparaging the Mac maker as a competitor that doesn't offer as much variety as the vast Windows PC ecosystem.

Gelsinger and Intel are trying to have it both ways, which is a poor place to be when your company has already fallen behind. As cutthroat mob boss Michael Corleone says in "The Godfather:" "It's not personal -- it's strictly business."

mike1

Not any different than Samsung competing with phones and working to be a supplier for Apple.

Beats

If Apple went with Intel for MANUFACTURING wouldn’t it be cheaper than all Windows virus machines for them because the actual DEVELOPMENT is made in-house?

Sounds like it could be a good deal. I would keep Intel as a backup though and not main supplier. 

sflocal

" Intel CEO Pat Gelsinger admitted that his company was unable to meet the needs of Apple..."

It's not necessarily being unable to meet Apple's needs, Intel couldn't meet the market's needs.  It's why AMD came in with guns blazing and showed Intel how to do it right and is progressing at a rate that will take Intel years to catch up.  It's an embarrassment really that showcased Intel's incompetence in remaining a market leader.  Intel essentially abandoned that position.

The success of the M1 in every area that Intel could only dream of is the opening of Pandora's box and there's no going back.  If Apple continues with the success of its ARM offerings, it may be the catalyst for Microsoft to WindowsARM polished for retail use outside of its own products.  PC makers may begin creating its own ARM-based general-purpose PC's and the result could be the x86 architecture being relegated to obscurity in 10 years, if even that.

Intel courting Apple for foundry business is a good idea as Intel has better now start looking for a PlanB source of revenue in case its CPU business starts falling off a cliff.

qwerty52

Beats said:

If Apple went with Intel for MANUFACTURING wouldn’t it be cheaper than all Windows virus machines for them because the actual DEVELOPMENT is made in-house?

Sounds like it could be a good deal. I would keep Intel as a backup though and not main supplier. 

Exactly.  Intel is dreaming to become a main Apple supplier, but in the same time is investing in a dirty anti-Mac media campaign.

It is crazy! Every company with business problems this days, automatically starts unfair anti-Apple campagne, hoping in 

this way to cover the mistakes, made by their own CEO’s: Facebook, Epic, Intel.............

CuJoYYC

lmasanti said:

—three month to bankruptcy—.

This is a myth. Apple's cash and cash equivalents in the mid 90s would last 7 years assuming their quarterly losses matched the worst quarterly loss of that period. I know. I built an all Mac business based upon this forgotten fact. It wasn't pretty but it wasn't on the brink of bankruptcy either.

dewme

mike1 said:

Not any different than Samsung competing with phones and working to be a supplier for Apple.

Yes indeed, it is strictly business. At some level you also have to recognize that Apple will not be the last product or system builder to roll their own SoC. We may want to start recasting the SoC moniker to "solution on a chip" because the scope of what can be done with SoCs will only get closer to and more directly focused on addressing the actual business logic and domain specific problems that companies are trying to solve - and do it in silicon. Silicon solutions to real business problems designed by those who own the problem (like Apple), not just silicon pieces & parts designed by those who know how to build pieces & parts. Big difference.

There will always be a market for commodity and somewhat "generic" processors and collections of chips that can be lego'd together to build bigger things, but companies like Apple, Google, Microsoft, Amazon, media companies, ISPs, telecoms, cloud service providers, etc., will want closer-to-turnkey solutions that maximize the performance of their business solutions and services without paying for untapped potential and unused features in generic pieces & parts approaches that don't focus on their unique problems to the same degree.

Intel is heavily invested in being a pieces & parts company, not a solution provider. That's what's paying their bills today and Apple is shaving a small chunk off of their current bottom line, which is why they're acting goofy about Apple's M1. But they know they need to learn to play the SoC game to stay relevant against their real competition, the likes of TSMC. They know Apple can help them earn some street cred in the SoC game, which is why they're also sweet talking Apple about future business. These dances have always taken place between competitors, e.g., Apple and Microsoft, Microsoft and IBM, etc., but they don't always play out in public view and in such an openly embarrassing way.

StrangeDays

CuJoYYC said:

lmasanti said:

—three month to bankruptcy—.

This is a myth. Apple's cash and cash equivalents in the mid 90s would last 7 years assuming their quarterly losses matched the worst quarterly loss of that period. I know. I built an all Mac business based upon this forgotten fact. It wasn't pretty but it wasn't on the brink of bankruptcy either.

Not according to Gruber and every other Apple historian/writer I've read. It was dire. Certainly not 7 years of savings at the end.

22july2013

AppleInsider said:
It's not personal -- it's strictly business.

DAalseth

That leaves Gelsinger talking out of both sides of his mouth -- praising Apple in hopes of earning their business, but also disparaging the Mac maker as a competitor that doesn't offer as much variety as the vast Windows PC ecosystem. 

The ads are to deal with a short term problem. Courting Apple to be their fab is long term. I’m sure that TC understands this. 

anonconformist

What we might not see are Intel’s forecasts of research and the like for marketshare they anticipated, and how much has been spent.  Big bets are made.  If Apple caught Intel with the M1 announcement and they were aiming at meeting Apple’s needs or whatever, perhaps they won’t break even: a lot of people don’t understand that it takes awhile to recoup costs, and often businesses only make money in the last few percentages of customers and their purchases.

Perhaps Intel is really scared now: they should have been years ago.

Flytrap

lmasanti said:

Going back in time, when Steve Jobs took a falling Apple —three month to bankruptcy— the first thing that he made was to ‘propel the inner spirits’: The ‘Think Different’ campaign and then developed new products and lines —iMac/iPod—. No public speeches!

Intel —it seems to me after the new CEO'd announcements— that they try to ‘propel inner spirits’ with an idiotic marketing campaign! And then ‘bravado speech.’ Where are the products, just promises.

If life would be a ‘cause-effect system’ —which is not— Intel is already death.

Talk is cheap when you don't have any new ideas to put on the table that are different to your predecessor 

danox

StrangeDays said:

CuJoYYC said:

lmasanti said:

—three month to bankruptcy—.

This is a myth. Apple's cash and cash equivalents in the mid 90s would last 7 years assuming their quarterly losses matched the worst quarterly loss of that period. I know. I built an all Mac business based upon this forgotten fact. It wasn't pretty but it wasn't on the brink of bankruptcy either.

Not according to Gruber and every other Apple historian/writer I've read. It was dire. Certainly not 7 years of savings at the end.

Bullshit, unlike today Apple had no debt at the time, and money in the bank, that was the one thing the previous CEO’s before Jobs got right..

lkrupp

Well, Intel can’t even do 7nm yet so how do they expect to get to 5nm in order to make chips forApple?

cornchip

sflocal said:

... it may be the catalyst for Microsoft to WindowsARM polished for retail use outside of its own products. 

Hmmm... what’s your guess on when that will ever happen?

GeorgeBMac

AppleInsider said:

"Intel doesn't compete with Apple -- the PC ecosystem competes with Apple," Gelsinger said to CNBC, attempting to distance his company from the Mac-versus-PC spat. Except Intel itself has bankrolled the "Go PC" ads starring former "Get a Mac" actor Justin Long.

That leaves Gelsinger talking out of both sides of his mouth -- praising Apple in hopes of earning their business, but also disparaging the Mac maker as a competitor that doesn't offer as much variety as the vast Windows PC ecosystem.

Gelsinger and Intel are trying to have it both ways, which is a poor place to be when your company has already fallen behind. As cutthroat mob boss Michael Corleone says in "The Godfather:" "It's not personal -- it's strictly business."

That's not talking out of "both sides of his mouth".   It's simply the reality of situation.

Further, Intel is correct that Apple's M1 does not have the power of an Intel system.  But that could be an accurate but misleading claim since so few have a need for the full power of an Intel system (such as a gaming laptop) and an M1 will meet their needs splendidly.

GeorgeBMac

I would love to see an Apple / Intel matchup via Apple Silicon.

If successful, it would be a Win-Win-Win situation for Intel, for Apple and for the U.S.

The U.S. government should be fully behind and supportive of such a match-up in all ways possible -- not because of some silly, fabricated, "National Security Concerns" (that one has gotten over-used!).   But to return the U.S. to manufacturing strength.

China has no problem supporting and financing industrial expansion and the results speak for themselves -- an economy growing at triple the rate of ours.

Conversely, the U.S. has let its industries flounder and die from foreign competition.  It's response to that competition has been to attack that competition instead of strengthening U.S. manufacturing.   Obviously that approach did not turn out so well.  It makes unemployed or under-employed U.S. workers feel better.   But it doesn't bring back their jobs.

It's past time for the U.S. to do everything in its power to rebuild its industries so they are once again be competitive on the world stage.

It can do that by both supporting those industries directly and by rebuilding the failing, out of date infrastructure that those industries rely on.

It also has to improve its failing education system as U.S. students tend to fall far behind Asian students and higher education is becoming increasingly unaffordable for many (the days of getting a high paying union job in the mill with a High School Diploma are fading fast). 

And likewise U.S. workers should be paying less attention to "work-life balance" and thinking in terms of the Asian 996 schedule.

... The first step in competing is to become competitive.

.......It's not a question of IF the U.S. can do it but whether or not it has the will to do it.

lkrupp

Intel to invest $20 Billion for U.S. plants? 

https://www.cnn.com/2021/03/23/tech/intel-semiconductor-manufacturing-turnaround-plan/index.html

So how long does it take to get a new chip fab up and running? Five years, ten years? Apple will be long gone by that time. Maybe Apple could build its own chip fab and be done with it. They’ve got more than $20 billion laying around don’t they?

crowley

lkrupp said:

Intel to invest $20 Billion for U.S. plants? 

https://www.cnn.com/2021/03/23/tech/intel-semiconductor-manufacturing-turnaround-plan/index.html

So how long does it take to get a new chip fab up and running? Five years, ten years? Apple will be long gone by that time. Maybe Apple could build its own chip fab and be done with it. They’ve got more than $20 billion laying around don’t they?

I'm sure TSMC would be overjoyed at that.  Apple would still need to work with manufacturing partners until that fab were up and running, and they might find that a bit difficult.

Don't bite the hand that feeds you works both ways.

nicholfd

lkrupp said:

Intel to invest $20 Billion for U.S. plants? 

https://www.cnn.com/2021/03/23/tech/intel-semiconductor-manufacturing-turnaround-plan/index.html

So how long does it take to get a new chip fab up and running? Five years, ten years? Apple will be long gone by that time. Maybe Apple could build its own chip fab and be done with it. They’ve got more than $20 billion laying around don’t they?

TSMC said two years for their new plant coming to Arizona.

blastdoor

GeorgeBMac said:

I would love to see an Apple / Intel matchup via Apple Silicon.

If successful, it would be a Win-Win-Win situation for Intel, for Apple and for the U.S.

The U.S. government should be fully behind and supportive of such a match-up in all ways possible -- not because of some silly, fabricated, "National Security Concerns" (that one has gotten over-used!).   But to return the U.S. to manufacturing strength.

China has no problem supporting and financing industrial expansion and the results speak for themselves -- an economy growing at triple the rate of ours.

Conversely, the U.S. has let its industries flounder and die from foreign competition.  It's response to that competition has been to attack that competition instead of strengthening U.S. manufacturing.   Obviously that approach did not turn out so well.  It makes unemployed or under-employed U.S. workers feel better.   But it doesn't bring back their jobs.

It's past time for the U.S. to do everything in its power to rebuild its industries so they are once again be competitive on the world stage.

It can do that by both supporting those industries directly and by rebuilding the failing, out of date infrastructure that those industries rely on.

It also has to improve its failing education system as U.S. students tend to fall far behind Asian students and higher education is becoming increasingly unaffordable for many (the days of getting a high paying union job in the mill with a High School Diploma are fading fast). 

And likewise U.S. workers should be paying less attention to "work-life balance" and thinking in terms of the Asian 996 schedule.

... The first step in competing is to become competitive.

.......It's not a question of IF the U.S. can do it but whether or not it has the will to do it.

I agree. 

Intel has a long road ahead, but their 7nm process (roughly equivalent to TSMC 5nm)  might be a reasonable option for desktop Macs, if intel charges a low enough price.