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Apple may use Intel chips

Apple Computer Inc, the maker of Macintosh personal computers (PCs), may announce it will use Intel Corp's chips to build faster and cheaper PCs, Cnetnews.com reported.

Apple Chief Executive Steve Jobs may announce plans to order chips from Intel in a speech today at a company conference for software developers, Cnetnews.com and the Wall Street Journal said, without saying where they got their information.

If Jobs has decided to get chips from Intel, he will gain access to lower-cost parts that run faster than the chips from former Motorola Inc unit Freescale Semiconductor Inc and IBM Corp that Apple has used to power Macs for 21 years.

By selling to Apple, which has its own PC operating system, Intel would be able to count all major PC makers as customers.

"Any move to embrace Intel could help lower Apple's cost structure and help it compete on the low end," UBS AG analyst Benjamin Reitzes said in a May 23 note after the Wall Street Journal reported Apple was considering a deal with Intel.

Microprocessors are the semiconductors that control all of the basic functions of a PC.

Jobs has been working this year to court customers turned off by Apple's prices and attracted to less-costly machines that run Microsoft's Windows operating system. Microsoft's Windows runs almost 95 percent of the world's PCs.

Cnet reported that Apple will use Intel chips in cheaper, less powerful machines starting next year, then in more expensive models from 2007.

In January, Jobs introduced the Mac mini, the lowest-priced Mac ever. The Mac mini starts at US$499 without a monitor, keyboard and mouse, and aims to rival so-called Wintel systems, Windows-based PCs that run on Intel chips.

Dell Inc, the world's largest PC maker, sells Intel-based desktops starting at US$299, according to the company's Web site.

Demand for the Mac is being spurred by consumer interest in Apple's iPod, the best-selling digital music player in the US.

The company posted its biggest PC sales gain in five years in the first quarter, with Mac shipments surging 45 percent, according to the Stamford, Connecticut-based researcher Gartner Inc. Apple, ranked fifth in US PC sales, saw its share of the market increase to 3.7 percent from 2.6 a year before, Gartner said.
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