Apple Poised to Overtake Intel as Top Mobile Chipmaker by Year-End
Apple is basking in the success of its latest product launch, the new iPad. Selling 3 million units in its first weekend of release alone, Apple is gearing for yet another landslide success in the tablet market. The new iPad is hot, indeed -- both figuratively, and literally -- and if the trend continues, Apple might just overtake Intel as the world's top mobile chipmaker by year-end.

Apple develops and builds its own system-on-chip processors for the latest iPhone, iPad and iPod Touch, with the A5X being its newest-generation processor, powering the new iPad. Analytics firm In-Stat says Apple could soon overtake Intel in the mobile processor business, given the popularity of Apple's iOS-powered devices.

Tablets on the Rise

Currently, Intel supplies low-power Intel Atom processors for notebooks and netbooks, and likewise markets Core i-series chips for higher-performance devices. But with tablets gaining in popularity over notebook computers, Apple is likewise gaining on Intel in terms of numbers.

The gap is not that large, reports In-Stat. In 2011, Apple shipped about 176 million processors in devices like the iPhone, iPod  touch and iPad with a 13.5% market share. Meanwhile, Intel sold 181 million mobile processors through notebooks and netbooks with a 13.9% share, and is currently at the top spot.

Other mobile chip manufacturers include Samsung, Texas Instruments and Qualcomm, which mostly create processors that use the ARM platform, similar to Apple's A4, A5 and A5X processors. Intel, meanwhile, uses the x86 platform.

ARM is a Reduced Instruction Set Computing (RISC) platform, optimized for use on mobile and low-power devices. x86, meanwhile, is traditionally used in desktop setups, although Intel's Atom platform -- currently in the "Medfield" generation -- is likewise optimized for low-power devices.

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Friendly Competition?

Interestingly enough, Intel provides Core i-series chips for Apple's own MacBook line of portable computers, which means the two companies are both partners and competitors in this industry. There are rumors that Apple might soon switch to its own ARM chips for use on the MacBook Air, MacBook and MacBook Pro lineup, although analysts say this will not be possible in the short term due to technical and performance constraints in ARM.

In-Stat says this is one reason why Intel is heavily marketing the Ultrabook platform -- ultra-thin and ultra-light notebook computers similar to the MacBook Air, but running Windows. "Why do you think Intel is putting so much into ultrabooks? It is not only to compete against tablets, but to offer competition to Apple, which could switch to the company's own products eventually," says In-Stat chief technology strategist Jim McGregor.

Windows 8 Worries

It's not just Apple that Intel needs to worry about, analysts say. Even with long-term success in the Windows platform, Intel might soon find itself scrambling to maintain its lead. Windows 8, which was released in public beta this February -- will come in both Intel x86 and ARM variants. Microsoft is making a big push for touch-based devices such as tablets, smartphones and other embedded devices with Windows 8. And with the dominance of ARM in tablets and smartphones, it does make sense to optimize the upcoming operating system for both Intel x86 processors and ARM-based processors.

Still, the question on performance remains. ARM is designed mostly for low-power applications, while x86 is better in terms of raw power. But as devices become more mobile, and as tablets continue to outpace notebook computers in sales, Apple could soon see itself the dominant player in this industry.