Reports suggest Apple is to develop its own chips in blow to Intel

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News that Apple is planning to use its own chips in Mac computers, replacing processors from Intel, raises some interesting questions for the industry.

The initiative, which could see Apple replacing Intel’s chips as early as 2020, is an interesting move on the part of Apple. Although still in its early development, according to sources, it looks to be part of a larger strategy that's aim is to make all of Apple’s devices, whether Mac, iPhones and iPads, work more seamlessly together.

It would certainly be a blow for Intel. The company’s share price reacted badly to the story tumbling 9 percent on the US stock exchange, before staging a limited recovery yesterday. An over-reaction? Possibly, Apple currently provides just over 5 percent of Intel’s annual revenue.

For Apple it's a significant move that would allow it to develop products on its own timelines, breaking the link with Intel’s own processor roadmap.

Several commentators have said that the move would make commercial and technical sense for Apple which could move more quickly in bringing new features to market.

It would also mean that Apple would be the only major PC maker to use its own processors as Dell Technologies, HP, Lenovo and Asustek Computer all use Intel chips.

Using its own chips Apple would also be able to more tightly integrate new hardware and software. It has already been integrating user-facing features, and more recently started sharing lower-level features like a new file management system.

Intel has dominated computing processors for more than a decade and while Apple’s decision to switch wouldn’t have a major impact on the chipmaker’s earnings, a bigger concern would be if this was to herald a wider trend with big customers looking to designing their own components.

Could it also be signalling that Intel’s rivals are closing the gap on the company’s manufacturing lead?

Interesting times ahead.