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Tech giant Apple Inc. on Tuesday is reportedly preparing to make all chips in its Mac computers in-house as soon as 2020, replacing processors by its long-time chipmaker Intel Corp. in the bargain.

Sources familiar with the matter stated that the plan, called Kalamata, is still in its early stages, but will see Apple work towards getting more devices, including Macs, iPhones, and iPads operate similarly and smoothly together.

The initiative, which executives have approved, is likely to be a multi-step process and would not establish an immediate change to homegrown chips. Apple’s biggest task in changing chip designs in 2005 was rewriting all of its software to work better with Intel’s chips.   

The switch over may possibly start with the company’s laptops, such as the 12-inch MacBook and the iMac.

If that happens, the Mac computer line would have processors similar to the recent A11 bionic chip in the iPhone 8 and iPhone X. All iPhones, iPads, Apple Watches, and Apple TVs currently have Apple-made chips based on technology from software designer Arm Holdings Plc.  

The strategy would also give the Cupertino-based firm more control over features and releases of its products, as well as its schedule for launching new devices. Additionally, using its own modem chips would make it the only major PC developer to utilize its own processors.    

Computer makers AsusTek Computer Inc., Lenovo Group Ltd., HP Inc., and Dell Technologies Inc. use Intel chips.

Apple and Intel declined to comment on the report.

Intel’s Possible Separation from Apple

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The shift would be a huge strike to Intel, which has been supplying the smartphone maker with processors since 2005. Its partnership with Apple has resulted to the Mac’s success and an alliance with one of the top brands in electronics.

Shares of Intel were down by 6 percent to $48.92, following the report, but added 0.1 percent to $48.97 in after-hours trading.  Apple’s shares climbed 0.2 percent to $167.15 in after-hours trading.

A US software firm estimated that Apple’s business accounts for about 5 percent of Intel’s annual revenue. Aside from the chips in Macs, the multinational tech group also uses the chipmaker’s processors in some iPhones and iPads.

Still, given that the project could be a multi-stage transition, Intel chips will probably stay in the tech firm’s high-grade products, such as the iMac Pro and upcoming Mac Pro 2018 until the company can create in-house processors that can fulfill the demands of professional Mac users.

Intel has seen its key PC market decline, but it was able to achieve a new business with Apple by providing 4G chips for some iPhones.

However, as the Santa Clara-based corporation grows in the mobile sector, some of its competitors have engaged in laptops. Telecom equipment company Qualcomm teamed up with PC makers Microsoft Corp. and Asus to build always-on computers that resembled mobile devices.

Intel’s attempts to create chips for mobile phones did not really created much of an impact, despite billions of dollars of losses, and now it might have to deal with the possibility of its processors being surpassed by rivals from the mobile market.

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