Intel eyes Apple as it plans future chips - Reuters

By Noel Randewich and Poornima Gupta

NEW YORK | Wed May 18, 2011 12:56pm EDT

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.

Apple designed its own processors for the iPhone and iPad using technology licensed from Britain's ARM Holdings (ARM.L), widely used in the mobile market.

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.

While its processors are the brains in 80 percent of the world's PCs, Intel has struggled to adapt its chips to work well in mobile gadgets.

Texas Instruments (TXN.N), Samsung (005930.KS) and Qualcomm (QCOM.O) are major players in smartphones and tablets, using ARM's technology to make processors more energy-efficient -- a key requirement for mobile devices that depend on batteries.

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)