Kaufman on Apple chips

In spite of a fledgling attempt at chip design, Apple will likely stay with third-party components when it comes to building most of its hardware, says Kaufman Bros. analyst Shaw Wu. Bringing design in-house is said to have several possible advantages, such as faster and more power-efficient iPods, iPhones, Macs and other devices. The move could also increase barriers to competition, preventing other companies from basing designs on shared technology.

The major risk, says Wu, is simply that Apple's chip division will likely need a constant influx of new cash, as well as sharp talent. Without these, third-party vendors may manage to keep or regain any advantage Apple attempts to assert. In this regard the company is expected to continue dependence on outside parts, such as the Intel CPUs at the core of all Macs. Apple is noted to have a history with chip design, having once designed them for a number of internal purposes, and collaborated with IBM and Motorola on PowerPC processors.

by MacNN Staff