Intel eyes Apple as it maps its future

NEW YORK Wed May 18, 2011 6:14pm EDT

A man walks past an Intel logo during a news conference by Intel Chief Executive Paul Otellini in Taipei in this October 28, 2010 file photo. REUTERS/Nicky Loh

A man walks past an Intel logo during a news conference by Intel Chief Executive Paul Otellini in Taipei in this October 28, 2010 file photo.

Credit: Reuters/Nicky Loh

Related Topics

NEW YORK (Reuters) - Trend-setting products launched by Apple Inc (AAPL.O) are a key factor in Intel Corp's (INTC.O) plans for new processors, a senior executive of the world's top chipmaker said.

Tom Kilroy, a senior vice president at Intel, told the Reuters Global Technology Summit in New York on Wednesday that the runaway success of the iPad and other Apple products shapes how Intel thinks about future devices and the chips that will power them.

"We work very closely with them and we're constantly looking down the road at what we can be doing relative to future products. I'd go as far as to say Apple helps shape our roadmap," Kilroy said.

"Apple -- they push us hard," he said.

Intel's chips power 80 percent of the world's personal computers but so far have failed to gain traction in the mobile market, where manufacturers favor energy efficient processors designed with technology licensed by Britain's ARM Holdings (ARM.L).

But in its high-end MacBook PCs, which set the tone for other computer manufacturers, Apple uses powerful Intel chips. Kilroy played down suggestions that ARM processors could eventually unseat the world's top chipmaker in those premium PCs.

"Go look at the performance of those platforms. They're taking our latest and high-end end versions of second-generation core, and ARM doesn't even come close to any capability there," he said.

Kilroy would not specifically confirm whether Intel has been guaranteed a place in future MacBooks, saying that kind of announcement would be up to Apple.

Inclusion in an Apple product is seen as a major coup for electronics suppliers, given the technology icon's reputation for quality and innovation. The big sales volume of Apple products also means major revenue for component sellers.

After focusing for decades on building ever more potent PC chips, Intel has struggled to shift its thrust to energy efficiency -- a key requirement for mobile devices that are battery-dependent.

Texas Instruments TXN.N, Samsung (005930.KS) and Qualcomm (QCOM.O) have become major players in smartphones and tablets, using ARM's technology to make energy-frugal processors.

The market for mobile chips is still tiny compared with Intel's PC processor business, but investors expect it to grow quickly and the Santa Clara, California, company is racing to use its massive lead in manufacturing technology to catch up.

Meanwhile, Intel's core PC market is being shaken up, with long-time bedfellow Microsoft Corp (MSFT.O) planning to make future versions of its Windows operating system compatible with ARM chips, and with manufacturers launching laptops running on Google's (GOOG.O) new Chrome operating system.

Samsung and Acer (2353.TW) are using Intel's Atom chips to make laptops outfitted with Chrome, which is essentially a web browser that steers users to use applications like email and spreadsheets directly on the Web, instead of storing software such as Outlook or Word directly on PCs.

"There's a lot of experimentation that goes on and we'll see how it plays out. We're eager to understand what usage models become popular," Kilroy said. "We're just happy we're the architecture of choice."

(Reporting by Noel Randewich and Poornima Gupta, additional reporting by Jim Finkle and Bill Rigby; Editing by Matthew Lewis and Phil Berlowitz)

FILED UNDER: