Did Apple Just Rain on NVIDIA's Parade, Again?

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Just last week, Apple (NAS: AAPL) rained onNVIDIA's (NAS: NVDA) parade when it stacked up its new custom A5X processor against the quad-core Tegra 3, while boasting four times the graphics performance.

Well, it looks like Cupertino may be at it again by partially snubbing the graphics specialist in its bread and butter. According to SemiAccurate, Apple might not be including NVIDIA's newest GPUs in its upcoming MacBook upgrades to the extent NVIDIA was hoping for.

NVIDIA's newest Kepler architecture is built on a 28-nanometer manufacturing process, and the company already disclosed that it was having some 28-nanometer yield issues at foundry partner Taiwan Semiconductor Manufacturing (NYS: TSM) during the last earnings release. TSMC has been having 28-nanometer hiccups, and NVIDIA is just one of the chipmakers affected.

Rumor has it that NVIDIA is about to win back Cupertino, after Advanced Micro Devices (NYS: AMD) scored a cushy Mac spot years ago with its Radeon lineup, and all Macs that use discrete GPUs now use Radeon. Meanwhile, Intel (NAS: INTC) has been pushing the integrated graphics in its upcoming Ivy Bridge chips, which have been scoring reasonably well in some gaming benchmarks.

In a recent Foolish conference call with NVIDIA investor relations, the company explained that it addresses the integrated graphics threat every time around and this time should be no different -- an integrated GPU will never be able to achieve the performance of a discrete one. A beefed-up GPU is also one of PC makers' favorite upsells, including partners such as Dell and Hewlett-Packard.

This is absolutely true, but I still think that at a certain performance threshold, integrated GPUs may eventually offer "good enough" alternatives to the average user or casual gamer, while the hardcore gamers will always go discrete.

When Apple refreshes its MacBook lineup this year, which is expected to be a major redesign, the real question is to what extent NVIDIA's GPUs will be featured. The midrange will be the battleground. Intel chips will probably hold down the low end, as it does now with the 13-inch MacBook Pro, while the high end needs a discrete GPU, as the current 17-inch MacBook Pro sports an AMD GPU. If Apple switches back to NVIDIA, expect to see its offerings in the high-end models first.

The midrange 15-inch MacBook Pros currently also use discrete AMD chips, so this is where the story gets interesting. SemiAccurate thinks some of the midrange models will carry a discrete NVIDIA GPU, while others won't.

In fairness, if these rumblings turn out true, it would be primarily related to supply constraints, which is somewhat out of NVIDIA's control, as it relies on TSMC. Kudos, NVIDIA: It looks like you reclaimed a spot from AMD, although it may not be as big as it used to be.

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At the time this article was published Fool contributorEvan Niuowns shares of Apple, but he holds no other position in any company mentioned. Check out hisholdings and a short bio. The Motley Fool owns shares of Apple and Intel.Motley Fool newsletter serviceshave recommended buying shares of Apple, Intel, and NVIDIA, writing puts on NVIDIA and covered calls on Dell, and creating a bull call spread position in Apple. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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