Rumors of Apple (NASDAQ:AAPL) moving its processor supplies away from Samsung have been rumbling, considering the bitter rivalry the two companies have come to share, but according to one analyst, the divorce process will not be an easy one for the iPhone maker. According to RBC Capital’s Amit Daryanani, there are only three realistic chip supplier alternatives for Apple, but the process itself will be long and complicated.
What Are Apple’s Alternatives to Samsung?
“Shifting chip manufacturers isn’t easy and requires a complete redo of production and manufacturing process,” Daryanani wrote in a note to investors on Friday, according to Apple Insider. “Hence, these changes will take 12-18 months at minimum and won’t be commercially sold ‘til 2014.”
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Apple could possibly turn to Intel (NASDAQ:INTC), Taiwan Semiconductor Manufacturing Company (NYSE:TSM), or GlobalFoundries, the analyst said. While Intel has previously expressed interest in building custom processors for Apple and is ahead of rival ARM (NASDAQ:ARMH) in terms of development, the iOS platform is already heavily invested in ARM. TSM has been rumored to be preparing to build chips for Apple as early as next year, but the Taiwan company would need capital expenditures of between $1 billion and $3 billion. Global Foundries, which is already working with ARM to build 20-nanometer chips, could be another, though less likely, option…
Daryanani said Apple could also choose to “go vertical” and build its own chip fabrication plants, though this was a far-fetched possibility.
Why Would Apple Want to Make the Hard Move?
Speculation that Apple plans to take its chip business away from Samsung has been rising because of their growing rift. While the Korean company currently builds all custom processors found in the iPhone, iPad, iPod touch, and the Apple TV, the two are also fierce rivals in the smartphone and tablet markets.
Earlier this month, it was rumored that Samsung had hiked the price of its mobile processors to Apple by 20 percent, though the former hastily denied the move. However, that led analysts to speculate about the scope of the loss to Apple if such a hike were to come through.
Samsung’s contract to provide chips to Apple expires in 2014.
What Does it Mean for Apple’s Stock?
Stock markets abhor uncertainty, so this speculation is not going to help Apple’s share price. However, in the longer term, finding an alternative will be a solution that works in Apple’s favor. After all, being so heavily dependent on your main rival to manufacture your most important products is not the wisest of moves.
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