Apple plans to replace Intel chips in Macs with its own from 2020: Bloomberg - Metro US

Apple plans to replace Intel chips in Macs with its own from 2020: Bloomberg

FILE PHOTO: A man is reflected in a Apple store logo in San Francisco, California, U.S., August 21, 2017. REUTERS/Kevin Coombs/File Photo

(Reuters) – Apple Inc is planning to use its own chips in Mac computers beginning as early as 2020, replacing processors from Intel Corp , Bloomberg reported on Monday, citing people familiar with the matter.

Intel shares were down 7.6 percent at $48.10, while the tech-heavy Nasdaq was down 3.6 percent.

The initiative, code-named Kalamata, is still in early developmental stages but is part of a bigger strategy to make Apple’s family of devices work more similarly and seamlessly together, according to the report.

Apple and Intel both declined to comment.

The Mac plays a small part in Apple’s overall financial picture, with sales of 19.2 million units last year and accounting for 11 percent of Apple’s $229.2 billion in revenue for fiscal 2017.

But while the laptop and desktop computer market has been in a years-long slump amid the rise of smart phones, Mac sales rose 4 percent in 2017. The growth in Mac sales came even as PC sales declined slightly to 259.5 million units, the smallest drop since 2011, according to data from research firm IDC.

For its part, Intel still depends on PC sales for slightly more than half its revenue, though the chipmaker is aiming to make more of its money from growing markets like data centers. Intel does not disclose how much of its revenue comes from Apple, but reported its PC segment overall generated $34 billion in 2017, up 3.3 percent from the year before on the strength of higher sales of notebooks and high-end gaming computers.

But for the past several months, Intel has been dealing with the reputation fallout from the Spectre and Meltdown chip design flaws, which affected nearly every modern computing device.

(Reporting by Arjun Panchadar in Bengaluru and Stephen Nellis in San Francisco; Editing by Shounak Dasgupta and Leslie Adler)

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