Apple Keeps Intel and Qualcomm Out of iPad (AAPL, INTC, QCOM)

Apple Inc (NASDAQ: AAPL) did not use processors made by either Intel Inc (NASDAQ: INTC) or Qualcomm Inc (NASDAQ: QCOM) in its iPad. Apple CEO Steve Jobs asked his own engineers at Apple to develop the A4 processor for its newly launched tablet computer.

This move has given the Apple CEO more margin and more control over the iPad’s functions. Intel has been trying to enter the mobile devices market with its latest innovation, Atom, and Apple’s move to manufacture A4 rather than taking Atom for its iPad is a big blow to Intel’s strategy.

The biggest challenge for Intel is to manufacture processes that run applications faster without eating up battery time. This is very crucial for a mobile computing device such as the iPad. Although, Apple’s Mac uses processors run by Intel, it decided to keep Intel out of this innovation.

Qualcomm supplies chips for mobile phones and was looking forward to making its contribution in the iPad but that did not happen. Qualcomm had been supplying products to be used in Apple’s iPhone and was very keen on Apple using its latest product, the Snapdragon processor, for its iPad, but iPad chose to manufacture its own silicon chips.

Intel estimates that the iPad will only sell 2 million units this year while analysts at Goldman Sachs estimate that it will sell at least six million units. The iPad will start selling in March of this year. Apple shares rose by $2.67 to $194.73 while overall its shares have fallen 7.6% this year. Intel gained $0.21 to $19.61 while Qualcomm gained $0.58 to trade at $39.77.

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