Does This New Apple Inc. iMac Rumor Make Sense?

By Ashraf Eassa Markets Fool.com

Apple (NASDAQ: AAPL)-centric website MacRumors recently reported on a recent post in blog Pike's Universum, in which a purported list of specifications/upgrades for Apple's next-generation iMacs -- which the blog says will be coming in "late October" -- is provided.Though you can see the full specification list here, there's one part of the specification list that's worth doing a sanity check on -- the main processor.

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Image source: Apple.

No more Core processors for the iMac?

Apple's iMac computers have traditionally used chip-giant Intel's (NASDAQ: INTC) Core processor family. Today, Apple's iMacs can be configured with Intel's Core i5 chips, the middle-of-the-pack within Intel's Core processor lineup, or Core i7 chips, the cream of the crop.

This new rumor claims that, instead of using Intel's Core chips, Apple will use Intel's Xeon E3 processors.Despite the fancy-sounding name, Intel's Xeon E3 chips are little more than Intel's Core processors with a few additional capabilities enabled -- namely, support for ECC memory and vPro technology.

ECC memory -- ECC stands for "error correcting code" -- is a type of memory that, according to memory maker Micron (NASDAQ: MU), includes capabilities designed for "detecting and correcting single-bit memory errors.""By detecting and correcting single-bit errors, ECC server memory helps preserve the integrity of your data, prevent data corruption, and prevent system crashes and failures," Micron's webpage explains.

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I suspect that, if Apple really does shift its iMac line to Xeon E3 processors and away from Intel's traditional Core processors, it would be doing the shift mainly for ECC memory support.

Does this make sense?

If Apple's goal is to position the iMac -- and indeed, the Mac itself -- as a "professional" platform, then the use of Xeon E3 processors with ECC memory makes perfect sense. Apple already uses Intel Xeon E5 processors coupled with ECC memory in its Mac Pro line, so it's not as though use of such technologies would be unprecedented.

What's worth noting, though, is that, while the use of Xeon E3 processors with ECC memory may appeal to professionals and prosumers, these features don't really buy the average consumer much. In fact, Apple will almost certainly have to jack up prices on its ECC-capable iMac computers to compensate for what are likely to be higher memory prices.

So, does Apple force all potential iMac buyers to eat the costs of more expensive memory? Or does Apple simply offer "Core" options and "Xeon" options? Given how pricey Apple's iMac computers tend to be anyway -- and the supply-chain complexity of supporting too many computer models -- Apple may simply bet that its customer base won't mind a modest price increase due to the slightly pricier memory, and go all-in on Xeon.

Foolish takeaway

If Apple's goal is to position its Mac products as true "professional" products, while pushing more consumption-oriented consumers over to its iPad product line, then a move to Xeon-based iMacs (and MacBook Pros) with ECC memory support may be the right way to go.Apple may find that Xeon processors -- by their server/workstation heritage -- are more marketable to the professional/prosumer crowd, and even "regular" consumers might be enticed by the fact that, when they buy an Apple product, they get a Xeon processor rather than a "pedestrian" Core processor.

I have no idea if this rumor is true, but it's certainly plausible.

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Ashraf Eassa owns shares of Intel. The Motley Fool owns shares of and recommends Apple. The Motley Fool has the following options: long January 2018 $90 calls on Apple and short January 2018 $95 calls on Apple. The Motley Fool recommends Intel. The Motley Fool has a disclosure policy.