Intel made an enemy out of Apple back in 2010 when it helped create the so-called "UltraBook," which was powered by Windows but looked an awful lot like the MacBook Air. Partly in response, Apple started making its own A-series chips (with more than a little help from frenemy Samsung), and now the chip giant is reportedly paying for its "backstabbing style of partnership." According to an extensive report from AppleInsider, Intel's move has cost it around $7 billion in losses.
In the meantime, Intel has been paying the makers of Android tablets to take its x86 Atom chips over ARM chips from both Qualcomm and NVIDIA. That subsidizing has been responsible most of the low prices we've seen with Android tablets, but now the word is that Intel plans to "phase out these generous incentives," which could cause the price of iPad rivals to shoot up. And the worst part of it for Intel? Even after dumping all those billions into subsidies, Apple remains the world's leading tablet vendor.
The Asus Ultrabook. Look familiar?
The numbers spring from two consecutive years of losses. Intel itself reported that it had lost $3 billion in 2013, and now Morgan Stanley analyst Joseph Moore suggests that Intel's on track to lose another $4 billion this year. Apple's market dominance no doubt is the biggest factor in the decline of Intel's fortunes, but Microsoft surprisingly had a hand in it as well. Back in 2011, the Redmond giant started using the more efficient ARM chips for its Windows RT devices.
Intel's not out of the fight yet, as it plans to introduce new "SoFIA" chips that won't be available at subsidized prices. Again, though, that means that Android tablet makers may find it difficult to keep their tablets at their current prices, which ultimately should work in Apple's favor even in the context of an overall declining tablet market.