May 23, 2005

Apple said to explore use of Intel chips for Macs

SAN FRANCISCO (Reuters) – Apple Computer Inc. (Nasdaq:AAPLnews) has been in talks that could soon lead to a decision to use Intel Corp. (Nasdaq:INTCnews) chips in its Macintosh computer line, The Wall Street Journal reported on Monday.

Source: Yahoo News

The report, citing two industry executives with knowledge of recent discussions between the companies, said Apple was expected to agree to use Intel chips. But it said the talks could break down or could be a tactic to gain negotiating leverage with Apple’s current chip supplier, International Business Machines Corp. (NYSE:IBMnews).

Intel spokesman Chuck Mulloy declined to comment. An Apple spokesman did not return a call for comment, though a spokeswoman for the computer maker characterized the Journal report as “rumor and speculation.”

Adopting Intel chips would help ensure that future Macintosh systems could meet the price and performance of products from tough rivals such as Dell Inc.

Apple’s pricing, which has often been higher than rivals, could become more competitive if Intel were to provide the kind of marketing subsidies it has given to other computer makers, the newspaper said.

For Intel, winning over Apple would be a prestigious endorsement from one of technology’s most influential trend-setters and could associate the chipmaker with Apple’s hugely popular iPod music player.

Shares of Apple rose $1.28, or 3.4 percent, to $38.83 in morning trade on Nasdaq, while shares of Intel fell 6 cents to $26.29.

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