Intel’s grim forecast and mass layoffs prove Apple got ahead of the competition by abandoning its chip

Unless you’ve been living under a rock for the past half-decade, you know that Apple made the decision to ditch Intel from its Mac lineup and design its own chips instead. These processors, called Apple Silicon but commonly known as M-series chips, made the best Macs faster, quieter, more efficient, and more powerful than ever.

And it looks like Apple got ahead of the curve by moving away from Intel after the company sadly shared the news of massive layoffs. Some 15,000 employees will be laid off and the company will have to cut costs by $10 billion, after some pretty big losses. That leaves Intel with a pretty bleak outlook for the future.

The numbers really aren’t looking good. A $1.6 billion loss in Q2 2024, a far cry from a $437 million loss in the previous quarter, and a 1% year-over-year revenue decline. Intel’s Foundry business is a bottomless pit, losing billions on new fabs and fancy lithography that haven’t paid off yet. Even with the CHIPS Act poised to throw Intel a bone with up to $8.5 billion in funding, investors aren’t impressed. Intel is now the worst-performing tech stock in the S&P 500.

The situation is so dire that Intel’s big AI savior, Lunar Lake, is already being downplayed by CFO David Zinsner as a “narrowly focused product” that won’t save the day on its own. Maybe Panther Lake will be better, but that won’t happen until 2026. By then, Apple will likely have M5 chips running around everything Intel manages to muster.

The writing was on the wall when Microsoft jumped ship, abandoning Intel for Qualcomm in its latest Surface devices. Even Microsoft, a longtime partner, saw the iceberg and stayed away. Intel’s response? Trying to fix two generations of flawed processors with software updates, hoping to avoid recalls.

Thriving vs. Barely surviving

Intel’s plan to trim the fat includes cutting R&D and marketing spending by billions by 2026, reducing capital spending by more than 20% this year and halting non-essential work. They’re even suspending their dividend. The moves scream desperation, not innovation.

Apple, on the other hand, is thriving. The M-series chips set a new standard, pushing the boundaries of what we expect from our devices. Since their launch, the M-series chips have been praised for their performance, efficiency, and power, leaving Intel in the dust behind Apple. Meanwhile, Intel is stumbling over its own feet as it tries to catch up.

The ability to design custom chips to work with your own custom hardware is something that gives companies like Apple a huge advantage over those that buy off-the-shelf parts. Of course, that was the main reason Apple explored Apple silicon in the first place. More power, lower power consumption, and seamless integration with macOS that made Intel’s offerings look like relics of a bygone era.