According to a person who is close to one of the two companies involved, Intel is said to be talking to Apple about building chips
for the iPhone manufacturer based on Apple's specs. This is not Intel's usual MO, but if turning into a contract manufacturer helps it gain a higher profile in the mobile world, Intel doesn't seem to mind. Last week, the chip maker said that it would build chips for Altera using the latter's design, thus helping Intel enter the "foundry" business. Intel already has a line of chips for mobile devices, and some handsets, like the Motorola RAZR i
are built with them inside. ZTE also used Intel silicon inside the ZTE Grand X IN
, but these are off the shelf chips and not produced using another company's design.
Intel is talking to Apple about using Apple's specs to produce chips for the Cupertino based firm
Supposedly, this isn't the first time that Apple and Intel have had these discussions. Some analysts are wondering why Intel is talking and not just signing the deal. Pat Becker Jr, of Becker Capital Management says that this deal is a no-brainer
for Intel considering the other party involved. Becker says such a deal also is beneficial for Apple.
Even though becoming a foundry is risky, with business heavily dependent on the state of the economy, most analysts agree that this is a step Intel needs to take. Without a strong presence in mobile, Intel could lose its place as the top chip maker, a title already threatened by Samsung
. And speaking of Apple's Korean rival, Intel's $2 billion addition in capital expenditures this year to $13 billion helped fuel the fire that Intel was ready to take over the production of Apple's chip needs from Samsung.
"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., Becker Capital Management