There’s been an awful lot of rumours about Intel and takeovers recently. One, that Intel is about to buy (or merge) with AMD. Another, that Apple might be about to buy Intel. Well, there aren’t that many companies that have the financial clout to buy Intel, but there are a few that might want to buy them. Here’s what I think.
A takeover of Intel by Apple would make perfect sense for Apple, if not Intel. In fact, I’d say it ought to be right at the top of Tim Cook’s “To Do” list.Apple have recently started designing their own ARM chips for iPads and iPhones. It would make sense to buy Intel, decommission some of the products and turn their fabs over to making their own chips – which they’ve been designing themselves for a few years now. It means not having to deal with pesky outside suppliers like Samsung, with whom they have a bit of a history.
It would prove disruptive in the external market too – they could easily drop the mobile chips for external suppliers, which although it would pass the market over to AMD for Windows laptops, and effectively kill the Surface Pro, it would have a strategically far more important result – ending Intel’s push for Android. And more traction for Android is something Apple can’t really allow to happen.
Oracle earn bucketloads of cash, and already own the SPARC architecture through Sun – a hardware business they’ve been growing. Owning Intel would give them a way into the x86 server market, either with Solaris on x86 or their own version of Linux. It would also essentially give Oracle a very hefty slice of the “Windows tax”, as they would now be providing the chips for probably 80% of the Windows market. It would give them access directly to Intel’s design department, with the inevitable consequence that Intel could produce a line of processors “optimised for Java”.If Oracle really wanted to play hardball, of course, it wouldn’t then be out of the way to suggest to Microsoft that if they want that ready supply of Intel chips to continue, they might want to consider discontinuing that pesky “SQL Server” product with immediate effect – whether that’s legal or not, I’ll let the lawyers fight over, but I can imagine it causing Larry Ellison to purr with delight; it is, after all, pretty much the same sort of squeeze Microsoft put on OS/2 back in the day.
Legally speaking, this one would probably be the most difficult to achieve. I can imagine the DoJ would have something to say, and AMD would be right there, knocking on the door.Nevertheless, Intel’s recent announcement of upcoming Android notebooks must be alarming Redmond, and I can imagine that being pretty high up on Microsoft’s list of “things we really don’t want to happen”.
This one is quite the maverick on this list, but let’s think a moment.Google got into the hardware market by buying Motorola – mainly as a hedge to get Microsoft off Android’s back. That didn’t work. Owning Intel would pull the rug out from Microsoft, and essentially reverse the balance of power between the two companies, forever. Google would be able to dictate terms, and Microsoft could do little more than acquiesce meekly, knowing that Google essentially controlled enough patents, and enough of the market structure, to play enough hardball to strangle Microsoft’s businesses at any second. Certainly, the “Android tax” would stop overnight – it would have to, if Microsoft wanted to continue to work with the makers of Android – who would now be the largest supplier of the chips on which the vast majority of their software runs. Their only route out would be to push Windows entirely to an ARM-based infrastructure – something that’s not working very well right now.
As John-Louis Gassee pointed out, Intel are weak right now. They’re ripe to be taken over. For Apple or Google, Intel would represent the prize: control of the industry.
If Intel survives as a separate entity by the end of the year, I’ll be extremely surprised.
And once they’re gone, who’ll buy AMD?