Apple Drops Intel From New TV Box

NEW YORK (TheStreet) -- Apple's (AAPL) newest twist in TV hands Intel (INTC) yet another defeat.

The new, radically smaller Apple TV is the third attempt by Apple to build a set-top box that bridges the computer -- specifically iTunes -- to the living room television. And continuing its tech-killing trend toward eliminating suppliers by building devices to run on its own chips, Apple has displaced Intel inside the new Apple TV.

Apple is using its A4 ARM-based processor in the new Apple TV, replacing Intel chips that had been used in prior versions. Apple now uses the A4 in its iPad, iPod Touch and iPhone devices.

"Intel takes a big hit in the move, losing three sockets in the Apple TV and seeing the chance for future non-computer design wins slip further away," writes EETimes' Rick Merritt.

For Intel, the Apple TV loss is only the latest on the list of alarming defeats in new growth areas including tablets like the popular Apple iPad. This inability to expand into the mobile device market is particularly troubling as Intel's core PC chip market continues to lose steam.

Intel has been flailing of late in an effort to diversify. Last month, Intel offered $7.7 billion for security software giant McAfee (MFE) and then followed with a $1.4 billion deal this week for wireless chip maker Infineon (IFX).

Infineon, it's worth noting, is the current supplier of wireless access chips to the iPhone. But in what might be another blow to Intel, Apple could tap Qualcomm (QCOM) for the job if expectations for a Verizon (VZ) iPhone pan out.

Intel shares are down 22% in the past four months as the initial PC recovery trend has stalled and brighter opportunities dim.

--Written by Scott Moritz in New York.



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