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Intel Falls On News Apple Will Shift Toward In-House Mac Chips

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Intel Falls On News Apple Will Shift Toward In-House Mac Chips

Intel Corporation (NASDAQ: INTC) plunged Monday afternoon following a discouraging report from Bloomberg.

What Happened

Bloomberg reported that Apple Inc. (NASDAQ: AAPL) will begin integrating its own chips into Mac computers, effectively cutting Intel from the equation.

Why It’s Important

Apple’s project, called “Kalamata,” is in early stages and advances the company’s strategy of controlling a singular, integrated ecosystem. The move is intended to make Apple’s devices operate similarly and together, which is a selling point for the tech company.

By the market’s response, Intel’s lost supplier contract is expected to hurt, although the value of the relationship is not yet known. The loss doesn't bode well for a firm struggling to contend in a competitive chipmaker space, though. Intel is already seen to trail NVIDIA Corporation (NASDAQ: NVDA).

What’s Next

Apple executives have already approved the project and, according to Bloomberg sources, will likely initiate a multi-step transition from Intel to Apple chips. The switch will begin as early as 2020.

At time of publication, Intel shares were trading down 8.4 percent at $47.66. Amid a broad market sell-off Monday, Apple was trading down about 1.7 percent at $164.90.

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