Intel charges around $120-140 for each i5/i7 chipset used in Apple’s MacBook portfolio. Intel generates a gross margin of over 60% on each of these chipsets. This contrasts with ARM based chipset costs of around $15-30, with a mid 40% gross margin. It is possible, therefore, that Apple is keen to reduce the price point of its MacBook portfolio by transitioning away from Intel. It may be that Apple does not believe that Intel’s roadmap aligns with its own requirements, resulting in Apple either having to use an under-powered chipset or overpay for a more capable one. We believe this missalignment in incentives between the companies will continue to push Apple to take more
control of its own hardware.
Intel does have a line of lower priced chipsets (the Clovertrail range) that is based on the x86 platform and is priced at around $40. We expect many of the new Windows 8 convertible laptops to feature Clovertrail from early 2013. In addition, we are not sure if Intel would provide adequate performance level in this chipset, which would risk cannibalization of Intel’s higher ASP Core products. This touches on the long term product roadmap issue raised previously.
As tablets are increasingly successful then MacBook pricing may have to fall into the $500-1000 range to retain relevance. Anything that helps Apple to reduce costs, even by just a few percent, could make a material difference. With Apple having great success with its own ARM based AX processor line for iOS devices, the company may feel that it has the skill-set and economies of scale needed to successfully and cost-effectively evolve the AX line into a family of devices. This portfolio could see a range of solutions that favour efficiency over power for devices, where battery efficiency is essential through to chipsets that trade efficiency for power for devices with bigger batteries or that can rely on power cords.