Apple Computer Inc. has been in talks that could lead to a decision soon to use Intel Corp. chips in its Macintosh computer line, the Wall Street Journal reported  on Monday.
The report, citing two industry executives with knowledge of recent discussions between the companies, said Apple will agree to use Intel chips.
Neither company would confirm the report and an Apple spokeswoman told the Journal she would characterize it as "rumor and speculation."
It was unclear whether such a move would signal a large-scale shift away from chips made by IBM, Apple's longtime supplier, the report said.
Apple could choose to add some Intel-based models to its product line or make a complete shift to Intel's chip technology in what would be seen as a serious blow to IBM's microprocessor business, the newspaper said.
Adopting Intel chips would help ensure that future Macintosh systems could meet the price and performance of products from tough rivals such as Dell Inc.
Apple's pricing, which has often been higher than rivals, could become more competitive if Intel provides the kind of marketing subsidies it has given to other computer makers, the newspaper said.
Apple sells only about three million computers a year -- a small portion of the estimated 200 million sold globally.
But for Intel, winning over Apple would be a prestigious endorsement from one of technology's most influential trend-setters and could associate the chipmaker with Apple's hugely popular iPod music player.
Despite significant performance gains in recent years, the PowerPC platform still falls short of the outright speed claims of Intel and its main rival AMD. Although this may not affect real world performance - too many other factors have to be taken into consideration - it has a big influence on consumers' perceptions. Recently, Apple was unable to fulfil a promise to have 3GHz G5 chips within a year of the unveiling of the G5-based Power Mac.
Moreover switching to Intel could result in cost savings and, consequently, further price cuts. Intel also has power saving technologies that could be deployed in Apple's key notebook models, the iBook and PowerBooks.
Any decision to go with Intel will require some rewriting of the OS X code. However it is highly unlikely that any changes will enable it to run on any Intel-based PC; Apple will ensure that it is hardware specific though hackers would doubtless be keen to get their hands on it.
Rumours of secret versions of Mac operating systems that run on Intel hardware have been circulating for years. They have been given some substance by former Apple employees who have suggested that it remains a fall-back option should the PowerPC platform fail.
Of course there is every chance that this is all a smokescreen and next month, at Apple's Worldwide Developer Conference., CEO Steve Jobs will unveil a 3GHz Power Mac and a G5 PowerBook.