Intel who were dealt a major blow by Apple for the second time in 18 months has withdrew its full-year sales forecast, citing “significant economic uncertainty”.
The forecast came after news broke that Apple is set to dump Intel processor for their next Mac range of PC’s, last year Apple walked away from a wireless modem deal with Intel after striking a deal with Qualcomm following a Court case in the USA.
Overnight shares in Intel fell 5% despite a 23% jump in first-quarter revenue and better-than-projected profit, bolstered by demand for chips that run the laptops and server machines companies need to keep people working from home.
Apple who are a major customer of Intel is set to use their own processors in its iPhones and iPads, Bloomberg claimed.
Apple is working on three different processors for its Mac line based on the A14 processor that will power the next-generation iPhone and Mac PC’s.
Apple started using Intel’s processors 16 years ago in 2006, and a year later all Macs featured its chips.
In the past Apple has traditionally relied on outside suppliers for its modem chips, a crucial part that connects devices to wireless data networks.
During the past three months Apple pulled in $11 billion in revenue from sales of its Mac line of PC’s.
Shares of Apple were up 0.9 percent in early Thursday trading, to $278.51.
Intel’s latest profit outlook fell short of estimates, sparking concerns that a spending slowdown will drag on business for the rest of 2020.
Sales in the current period will be about $18.5 billion, the company said in a statement last night.
Companies have reacted to coronavirus shelter-in-place orders by buying more laptops to keep employees working remotely.
At the same time, data-centre owners have responded to a surge in videoconferencing, social-media use and movie streaming by stocking up on pricey Intel processors that run server machines.
Those trends fuelled a 14% increase in PC-related chip sales for Intel in the first quarter, and a 43% gain in the company’s data-centre division.