Will Apple Pull the Plug on Intel?

Rich Tehrani : Communications and Technology Blog - Tehrani.com
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Will Apple Pull the Plug on Intel?

An interesting difference between Droid devices and those of the iOS variety is that Apple gadgets require users to plug the devices into a computer for OS updates while the Google Droid works over the air or OTA. So last night’s earnings release from Intel which touted a record quarter in-part is influenced by the fact that the more iPods, iPhones and iPads there are, the more computers you need to sync, backup and upgrade the OS.

And regardless of whether you choose a Mac or PC to connect to your gadget, you are in fact using an Intel processor.

But now that carriers have gone from unlimited data plans to tiered where they get paid to provide more bandwidth, what is to stop them from allowing Apple to provide operating system updates OTA?

This of course is why a product like the iPad is an in-between device as you need a computer to connect it to. So in fact the more iOS devices you sell, the more Intel processors are needed.

But at some point soon it is conceivable Apple will change its policy and when it does there will instantly be less need for Intel processors on desks and laps. In fact, all they have to do is allow updates over WiFi to have a deleterious effect on Intel’s value by pressuring the PC client group to go from flat to declining sales. And this is likely the reason why a record year and quarter from the chip maker was met with a declining stock price of 1% so far today.

intel-share-price.jpg

It is worth pointing out however that cloud-based and data center sales grew by 15% for the tech behemoth and updates which aren’t performed via local PCs will be powered by servers in the cloud which are currently powered by higher-margin Intel processors and components.



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