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Technology (Apple) Businesses The Almighty Buck Technology Apple IT

Speculation on Real Reasons Behind Apple Switch 659

/ASCII writes "There is an article over at Ars Technica with some insider information about the reasons behind Apples x86 switch, given that the new IBM processors seem to be a perfect fit for Apple. The article claims that Apple hopes to power its entire line, from Servers to desktops to iPods and other gadgets with Intel CPUs, and that by doing so, they will gain the same kinds of discounts that Dell get."
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Speculation on Real Reasons Behind Apple Switch

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  • Apple v. Dell? (Score:3, Insightful)

    by PlancksCnst ( 877593 ) on Monday July 11, 2005 @08:32AM (#13032210) Homepage
    Does Apple really sell as much (volume-wise) as Dell does?
    • Re:Apple v. Dell? (Score:5, Insightful)

      by Dagny Taggert ( 785517 ) <hankrearden AT gmail DOT com> on Monday July 11, 2005 @08:34AM (#13032216) Homepage
      Good point. I would assume that sales volume would have to be very, very high to receive a Dell-like discount. I don't think Apple qualifies. Then again, Intel might give them a good discount to keep them onboard. Apple could always re-marry IBM.
      • Re:Apple v. Dell? (Score:5, Insightful)

        by CaymanIslandCarpedie ( 868408 ) on Monday July 11, 2005 @08:45AM (#13032302) Journal
        Then again, Intel might give them a good discount to keep them onboard. Apple could always re-marry IBM.

        Or just use the oldest trick in the book ("We are looking at using some chips from AMD."), and then see what "discounts" you qualify for ;-)
      • Re:Apple v. Dell? (Score:3, Interesting)

        by alfredo ( 18243 )
        I think a combination of non computer items like the iPod, prospects of rapid market share growth, customer loyalty, and mindshare could give Apple leverage when it come to price per unit.

        Let's face it, Intel would love to be associated with a company that seems to have a touch of genius in marketing and design.
      • Re:Apple v. Dell? (Score:5, Insightful)

        by Austerity Empowers ( 669817 ) on Monday July 11, 2005 @10:01AM (#13032941)
        No, the larger the volumes you have, the lower the prices you can get. There's no unit step at a certain volume although if you are the single largest consumer you can probably get an even bigger cut. Either way they'll get lower prices on Pentium devices than on PPCs, and lower prices on PC components than traditional Apple/PPC components. The simplest reason is that the PPC volumes are low enough that R&D & other NRE expenses are a significant portion of the per device cost. On a mainstream Intel processor, those costs are divided amongst every consumer, it's almost invisible.

        High end PPCs are used in a lot of places, but not in significant volume (when compared to a Pentium).

        I don't see why anyone cares what hardware is under the hood in an apple, no one uses an Apple because it has a PPC. They use it because Apple owns & supports the entire system and the OS is good.
        • Re:Apple v. Dell? (Score:5, Insightful)

          by nutshell42 ( 557890 ) on Monday July 11, 2005 @10:10AM (#13033047) Journal
          I don't see why anyone cares what hardware is under the hood in an apple, no one uses an Apple because it has a PPC. They use it because Apple owns & supports the entire system and the OS is good.

          There are a few who care. And the likelihood that a random Mac user who also frequents /. cares about the CPU should be much, Much, MUCH higher than that of the total population (of Mac users =)

        • PPC matters to some (Score:3, Interesting)

          by DreadSpoon ( 653424 )
          no one uses an Apple because it has a PPC.

          That isn't strictly true. There are tons of people, myself included (to my shame), who find alternative technologies attractive. I mean, let's face it, Windows _would_ let me do everything I need to, but I use Linux because of basically irrelevant technological advantages it has. The same goes with PPC. Sure, it might not *really* matter, but PPC is sexy, PPC is "cool," and PPC is a selling point for Apple machines.

          To be quite honest, I think OS X is the wors
    • Re:Apple v. Dell? (Score:3, Interesting)

      by gabebear ( 251933 )
      Does Apple really sell as much (volume-wise) as Dell does?

      Not even close.... yet.Apple has about 3% of the world's PC market and Dell has about 18% of the world's PC market. [cnn.com]

      Apple is probably counting on this deal to increase their volume of sales considerably.
      • It will help Apple's supply chain dramatically
      • It may lower the price they pay on higher end CPUs
      • Some organizations will buy mactel in place of wintel and then install Windows
        Reasons:
        1. Bulk discounts
        2. Less types of computers for IT to support
      • Re:Apple v. Dell? (Score:5, Interesting)

        by Temsi ( 452609 ) on Monday July 11, 2005 @11:54AM (#13034066) Journal
        Let me put it this way:

        As someone who is OS agnostic, dislikes M$ but doesn't feel Linux can replace Windows completely any time soon due to lack of software (no flames please, I'm talking about Photoshop, Avid, After Effects etc), I'd love to have OS X as my system (especially since I love BSD).
        However, Macs are terribly expensive. I think that's mainly what has been keeping them at 3% of the market.
        If they can lower their prices (which I'm sure had something to do with the decision to switch), and I can run Windows, Linux and OSX natively on the same hardware, I'm switching - simple as that.

        In fact, I'm sticking with my AMD64 for a little while longer until Apple announces their prices... then I'll decide.

        If their prices come down enough to warrant a switch, I'll switch. Having been a PC guy for 20 years, that's big - and if even 10% of the market thinks like I do, Apple's market share can easily quadruple in a year. Now, that should be incentive enough for Apple.
  • by J Barnes ( 838165 ) on Monday July 11, 2005 @08:33AM (#13032214) Homepage
    This is a really interesting take on the switch that I hadn't considered before. This move to intel makes all the sense in the world if Apple is trying to cram an intel processor inside the iPod, and for pure volume discounts alone, this could really help apple's overall profit margin.

    I'd worry about putting all my eggs in one basket, but I suppose as far as baskets go, intel is a relatively safe bet overall.
    • by Ed Avis ( 5917 ) <ed@membled.com> on Monday July 11, 2005 @08:36AM (#13032225) Homepage
      And why does Apple need to switch from plain-Jane ARM processors to Intel's greased-lightning XScale? What do they need that extra power for? Why, to bring back the Newton, of course!
      • by /ASCII ( 86998 ) on Monday July 11, 2005 @08:44AM (#13032289) Homepage
        The second coming of Newton, a video iPod or perhaps a PSP killer. Or all of the above, but with an integrated cellphone. And a pony!
        • by doublem ( 118724 ) on Monday July 11, 2005 @09:00AM (#13032420) Homepage Journal
          First, we had the Wintel monopoly.

          Then some competitors came along and the non-Intel processors running Windows carved out a large enough market share to justify splitting the terms off into ChipZilla and Wintendo.

          Now, we have MAC going Intel. What the HELL do we call this?

          MacTel?

          Intelmac?

          Apptel?

          Intenapple?

          What terms can we use now???
        • by bhurt ( 1081 ) on Monday July 11, 2005 @09:51AM (#13032851) Homepage

          The second coming of Newton, a video iPod or perhaps a PSP killer. Or all of the above, but with an integrated cellphone. And a pony!


          With all the horseshit I've seen on this topic, I knew there had to be a pony around here somewhere.

        • by Phat_Tony ( 661117 ) on Monday July 11, 2005 @11:21AM (#13033738)
          Everyone says "video iPod," but I think they have the wrong thing in mind. Jobs has said before, and I agree with him, that mobile video playback just isn't a killer app. People want to listen to music in their car, working out, walking around, working- everywhere they don't want to watch TV and movies. People want to watch their movies on their giant home theater setups. Maybe a few people who take public transportation want to watch downloaded video on their iPods, but the potential market for portable video just isn't worth designing a product line to go after. Sure, if you can plop it into your existing product as a software addition, like the PSP (and probably future iPods), you might as well, it may be handy. But it's not a killer app.

          What might be a killer app to design a video iPod around is the DV (or HD) camcorder. Clip your iSight onto your iPod. Now you have a camcorder that's smaller than any other on the market and records approximately forever, strait to hard disk, no messing with tapes. Maybe in H264. I think that's what a "video ipod" is going to be.

          Have and iPod Video and want an HD camcorder? It'll cost a heck of a lot less than buying a DV camcorder, all you need is the iSight, which, by the way, you can still use as a webcam. Want to upgrade to an HD camcorder? Instead of giving Sony another $1000 to replace your DV camcorder with HD, pay Apple a quarter as much for their new HD iSight and plug it into your existing iPod Video.

      • by ceeam ( 39911 ) on Monday July 11, 2005 @08:48AM (#13032324)
        Thanks - the image of Isaac Newton with two bolts to his head (and stitches) growling "I live again" will haunt me today.
    • by doublem ( 118724 ) on Monday July 11, 2005 @08:50AM (#13032336) Homepage Journal
      It's too bad they didn't go with AMD processors instead. Then the iPod could have doubled as a hot plate / coffee warmer. That would be a useful technology fusion if you ask me. Far better than a crappy cell phone in an iPod!
  • by alexhmit01 ( 104757 ) on Monday July 11, 2005 @08:35AM (#13032219)
    Right now, Apple has to market Apple machines vs. Windows machines, and they are hard to compare. When the PPC is better, people don't believe it. They are either behind in performance or MHz/GHz, or something.

    This lets a comparison with Dell/HP be VERY clear.

    If the Apple hardware is $100-$200 more than a Dell, it is a straightforward question, is it worth this premium to get OS X. It makes for a straightforward comparison. In addition, if Apple's manfuacturing gets better (and they grow their share from the #8 player in the PC space to #3/#4, which is probably around a 10% market-share), then they can price equally to PC players and STILL make good margins, because they don't have to pay MS their fee.

    Forget JUST the processor difference, they can really enter a straight competition with a minor price premium for a superior system... Plus, if Microsoft stumbles and looks vulnerable, they can compete in the OS market.

    Also, think about Government/Corporate contracts. Someone can write an RFP: runs Linux + random software that is x86 only... or runs Office XP... Since the Apple can, they can now compete for that contract.

    Lots of good things for Apple, and some minor fears for those of us suffering the transition. (I have in-house Cocoa apps that will now need to be QA'd on two platforms, even if development is "click a button.")

    Alex
    • by Chordonblue ( 585047 ) on Monday July 11, 2005 @08:53AM (#13032363) Journal
      You know Apple's not the only PC manufacturer that's been pushy. Dell has been dropping hints about using AMD for some time now and you can believe that everytime they do, Intel gets to shell out for another advertising campaign or something. I mean, how much 'testing' does Dell have to do to magically realize (like everyone else has) that AMD has the upper hand in most performance areas? I say that Dell merely does this to get more consessions from Intel.

      But look at it this way. Intel knows that Dell secretly fears Apple in it's space. What this is REALLY all about is Intel getting more leverage. I can just hear it...

      INTEL: "Oh? What's this Dell? You want to use AMD? Ok, then I guess you won't need this advertising spiff more than Apple will..."

      Intel is the real winner in this scenario, not Apple, although I have no doubt that Apple will thrive regardless.

    • by sg3000 ( 87992 ) * <(sg_public) (at) (mac.com)> on Monday July 11, 2005 @09:30AM (#13032693)
      > Right now, Apple has to market Apple machines vs. Windows
      > machines, and they are hard to compare. When the PPC is better,
      > people don't believe it. They are either behind in performance or
      > MHz/GHz, or something.

      I don't believe it either, and it's not "just marketing".

      I bought a 17" 1 GHz PowerBook G4 back in April 2003. Then in January 2005, the hard drive failed on that PowerBook, and I didn't have time to deal with it (and I couldn't be without my PowerBook), so I went out and bought a 17" 1.5 GHz PowerBook. A month later, I finally got around to swapping out the hard drive in the first 17" PowerBook, and I gave it to my wife.

      My intention was to replace my PowerBook G4 with a PowerBook G5, but to my shock, there wasn't a G5 PowerBook.

      When I took home my new PowerBook, it was almost exactly like my previous PowerBook. The first 17" PowerBook G4s were released in January 2003 and in the two years that had elapsed, there was no real difference in performance. In fact, I forgot that I had actually replaced my PowerBook -- that's how similar they were.

      Note that while desktop machines are stagnating in sales, laptops are where the growth is. The fact that Apple's flagship portable had basically remained the same for two years is horrible. Contrast this with the changes in operating system. Mac OS X 10.4 is wildly better than the OS that came with my previous PowerBook. So from a software perspective, Apple's doing great. From a hardware perspective, the changes just aren't keeping up.

      Ars seems to downplay the fact that IBM missed their 3 GHz target for the G5. More than that, they missed the laptop ready version of the G5, which some could argue is even more serious. People seem to want to blame Jobs or Apple's arrogance, but the point is, IBM hasn't been delivering. Results matter, and Apple's hardware is falling behind. Jobs is a smart guy to say, "we can't keep doing this" and he found a solution in Intel. I say, good for him. Now give me a laptop where two years of progress is noticeable.
      • I dunno about that... My 2 year old P4 laptop is on the verge of expiring after being dropped, slopped and overheated on a regular basis. Looking around at both the Wintel and Apple offerings, not much has changed in two years. Hard disks are a bigger, video chips are a faster. A few more bells and whistles which I would likely strip out as soon as a I brought the machine home.

        This is unlike the situation two years ago when I upgraded from a Win 98 / PIII / 15" XVGA laptop to my current XP / 3 GHZ P4
    • I think it cuts both ways. W/ the PPC processor the idea of performance could always be a bit vague. Yes you were paying $2k to $3k for a desktop but because the G5 ran faster on some codes and/on some benchmarks it could be justified. Now that they have switched to intel, they no longer can make the high profit margins. People are willing to pay $100->$200 (maybe) a premium for same performance for a better OS, but the $400->$500 margins are no longer going to work. Dell sells platforms for btwn $30
  • Options? (Score:4, Insightful)

    by Steinfiend ( 700505 ) on Monday July 11, 2005 @08:35AM (#13032220)
    Doesn't the choice to change processor basically give Apple and their users more options? If Apple release hardware that can run not only their own much loved OSX operating system, but also Windows, Linux and *BSD that it removes one of the major arguments about getting an Apple. Namely, "I can't run XXX piece of software, it doesn't support Apple". As long as a dual or even triple boot is possible then I can't see any reason to not get an Apple.

    Ultimately look at it this way, If the Mohammed won't come to the mountain, get a big crane and get ready to do some heavy lifting.
    • Re:Options? (Score:3, Insightful)

      by hackstraw ( 262471 ) *
      Doesn't the choice to change processor basically give Apple and their users more options? If Apple release hardware that can run not only their own much loved OSX operating system, but also Windows, Linux and *BSD that it removes one of the major arguments about getting an Apple.

      Only to a slashdotter does it make sense to buy a nice Apple computer so that it can run non-Mac programs and other operating systems like you can on a cheap PC.

      To other people, Apples are nice because they have a mature robust o
  • Snappy (Score:4, Funny)

    by Anonymous Coward on Monday July 11, 2005 @08:36AM (#13032224)
    When Apple compiles OS X on the 970, they use -Os. That's right: they optimize for size, not for performance. So even though Apple talked a lot of smack about having a first-class 64-bit RISC workstation chip under the hood of their towers, in the end they were more concerned about OS X's bulging memory requirements than they were about The Snappy(TM).

    misspelled Teh ...
  • by frankie ( 91710 ) on Monday July 11, 2005 @08:38AM (#13032235) Journal
    Lord Steve may seem insane, but if so, one of his disorders is obsessive-compulsive. He would not pull such a major change as switching to Intel unless he had a thick contract in hand with every i dotted and t crossed.

    If this theory is in fact the plan (for large values of if) then it's not just hope. It would be written in stone.
  • what about AMD? (Score:5, Interesting)

    by utopicillusion ( 843168 ) on Monday July 11, 2005 @08:38AM (#13032239)
    If such a move was made, does this make AMD's anti-trust case against Intel more convincing?

    Maybe now (because of the lawsuit), intel will not provide such deals to Apple. Is then, Apple in deep shit?

    Yes!
  • by Anonymous Coward on Monday July 11, 2005 @08:38AM (#13032243)
    Apple is planning to do for hot air what they've done for music with iHeat, the world's first ergonomically-designed space heater. iHeat will be the first space heater to use Apple's exclusive scroll wheel technology for setting the temperature, and only Intel has what it takes to get the job done.
  • by ryanvm ( 247662 ) on Monday July 11, 2005 @08:42AM (#13032278)
    Is it just me, or aren't the real reasons for Apple's switch obvious?
    • Cheaper processors due to economies of scale. Also cheaper because they will constantly be fought over by both Intel and AMD.
    • Running Windows apps in Mac OSX becomes much more feasible since they can now do virtualization instead of emulation. Dual booting between Mac OSX and Windows will now be a possibility as well.

    • My own tinfoil theory on the switch isn't only that Apple had grown weary of IBM's under-delivering, but also that IBM could not afford to keep Apple as a customer.

      Limited fab capacity? Check
      Huge orders coming in from next generation console manufacturers? Check

      Struggling to meet future demand, IBM had to choose between Apple and console manufacturers. IBM chose the latter.

      just my 2cp, of course ;)
  • High handed or not (Score:5, Interesting)

    by stefanb ( 21140 ) * on Monday July 11, 2005 @08:43AM (#13032283) Homepage

    Irrespective of whether The Steve dealt properly with IBM, the reality is and has been for many years that developing their own CPU (or having it developed for them) was just too expensive for Apple.

    The original idea of the Apple-IBM-Motorola coalition was that they would be able to compete with Intel by combining forces: CPUs for servers, workstations, and embedded systems; and by creating a third-party systems market to drive demand for these CPUs (PReP). This never really took off, so IBM and Motorola were stuck with having to compete with Intel for price/performance for a single customer that would only buy a fraction of what Intel and AMD would churn out. I have no idea how much it costs to keep up a competitive CPU architecture, but it must be in the hundreds of millions, if not billions per year.

    Cell might be cheap, but it doesn't allow Apple to compete with PCs on a price/performance or performance/watt level. And paying IBM to continue to develop the 970 architecture was just too expensive: people might be willing to pay a bit more for Apple systems, but only so much.

    Just look at all other contenders in the high performance CPU market: there's nobody left except for Sun and Fujitsu/Siemens, and they announced last year that they will cooperate on SPARC. From a pure market standpoint, Apple had little choice.

  • by Anonymous Coward on Monday July 11, 2005 @08:44AM (#13032294)
    I have to post this anonymously... You'll see why below. The real reason Apple switched from IBM is because IBM just hasn't gotten their shit together with 90nm. I know this because I recently left a job at a large semi-conductor manufactorer that used IBM for our digital fab. IBM repeatedly promised, "we'll fix the problems in our process" for YEARS, and just couldn't get their act together. With run after run of silicon, IBM couldn't manufacture the parts correctly (or other other customers parts). Finally, my company became fed up, and bit the bullet to switch to another manufactorer. It was a 4 engineer year sunk cost (to update some the design), and the design worked out of the chute (and at pretty good yields). You heard it here first... IBM just doesn't have their shit together at 90nm.
    • by Anonymous Coward
      I too have to post anonymously because of where I used to work (Apple), and frankly your story is a load of shit.

      I was part of the project team that maintained the x86 core of OS X and we in on a lot of the conference calls that Apple had discussing the impending switch. What acually happened was that senior management was extremely unhappy with IBM sharing the PowerPC technology with Apple's competitors Sony and Toshiba (via the Cell work, as well as other stuff that hasn't been announced yet). Apple di
  • AMD (Score:3, Insightful)

    by rerunn ( 181278 ) on Monday July 11, 2005 @08:47AM (#13032313)
    "Intel CPUs, and that by doing so, they will gain the same kinds of discounts that Dell get. If price of cpu's were really such a big factor, AMD might have been alot more willing to offer discounts than Intel.
    • BUT.... (Score:3, Insightful)

      by DesScorp ( 410532 )

      If price of cpu's were really such a big factor, AMD might have been alot more willing to offer discounts than Intel.

      True, but rock bottom price wasn't the goal here.

      1- Apple wanted not only better chip prices, but better laptop chips. While AMD arguably has better desktop processors, they have nothing that can compete with the Pentium M in terms of performance and battery life. And the Powerbook is what drove this change, not the desktop stuff.

      2- Steve Jobs is a label whore, marketing gear to the lab

  • Compile flags (Score:5, Informative)

    by pp ( 4753 ) on Monday July 11, 2005 @08:47AM (#13032315)
    They claim -Os is to remove bloat, not increase performance :-) Thing is, for kernel type code the resulting code is actually _faster_ than with gcc -O2, since there is a lot less cache pressure.

    The Fedora kernel people have benchmarked this quite a bit (and now compile kernels with -Os too), the difference is quite measurable, 5%:ish in some benchmarks.
  • by brockbr ( 640130 ) on Monday July 11, 2005 @08:51AM (#13032347)
    First off, I RTFA... It implies that the iPod & iTMS, not the Mac, could drive Apple's future. What is Apple without the Mac? What is Apple without OSX? If the simple answer is a "portable media player company with ties to the RIAA & MPAA", then so be it - But that answer is shortsighted. This can be seen by Microsoft's foray into this arena (witness Windows Media and Media Center PC's), along with Linux's abilities (Myth) in this same subset of the market. It's the Media stupid! The media is *not* the player. If Apple, which the article supposes, is out to drive the hand-held player market with it's technology, then it may very well succeed - In hand-helds that is. If it ignores the Mac as the center of *their* digital world, they may end up with a cute player and nothing more.
  • -Os (Score:5, Informative)

    by wowbagger ( 69688 ) on Monday July 11, 2005 @08:53AM (#13032366) Homepage Journal
    Compiling with "-Os" (optimize for smaller code size) is not always at odds with speed, as is implied in the article.

    While for some trivial benchmark code -O4 may generate faster code, for real-world applications keeping your code in cache is worth more than loop unrolling - so in real-world stuff often -Os is better than -O[2345].
  • Proprietary PC (Score:5, Insightful)

    by fbonnet ( 756003 ) on Monday July 11, 2005 @08:55AM (#13032382)
    With its switch to Intel, Apple is going to succeed where MS couldn't: build a "proprietary" PC that doesn't rely on anything legacy such as the BIOS.

    Nearly everything except the BIOS will be standard on the Mactel platform. Seems to me like the perfect occasion to introduce a "trusted", DRM-enabled platform from the ground up.

    Now Apple can tell the RIAA & MPAA: on our platforms, your stuff will be secure.

  • by alexhmit01 ( 104757 ) on Monday July 11, 2005 @08:55AM (#13032384)
    The desktop wars are over. Commodity IBM PC-compatibles with Microsoft OSes and Intel chips won. Sure the market is HUGE and niche markets (even #1 player Dell doesn't dominate the market, it owns the niche for moderately supported business machines with semi-custom orders) remain extremely profitable if done right, but Intel and Microsoft have extracted most of the profits. Even highly innovative AMD can only capture 20% of the market.

    In 1996 Fortune interviewed Steve Jobs and asked him what he would do if still running Apple. He responded that he would "milk the Mac for all it is worth and move on to the next big thing."

    This doesn't mean that those of us with an investment in Apple hardware (or more risky, custom Cocoa software like we have) mean that Apple is going to abandon the Mac....

    They are going the milk it for all it is worth.

    With OS X, we have a NeXTSTEP/Mac fusion that Steve likes, and Apple will keep profitably pushing out software updates that they sell, but that isn't Apple's growth.

    Their growth operations: software, when Steve rejoined they had recently gone from free OS upgrades to selling two upgrades, OS 7 and OS 7.5, IIRC, maybe 6 was sold as well.

    Now, Apple sells new OS Versions every 1 - 2 years. They put out an iLife upgrade annually. They will probably put out iWork annually. And they replaced their free iTunes system with a nicely growing .Mac system, where the cost of the storage is going to zero but their annual subscribers are growth.

    The average Mac customer pre-Jobs bought a Mac and used it for 6 years.
    The average Mac customer post-Jobs buys a Mac, and uses it for 3-4 years with 2 OS upgrades, 1 or 2 software purchases, and 20% of a .Mac subscription (or some similar number). That means that Apple can sell a low-margin system like the Mini, pocket $100 on the system, and hope to grab another $200-$300 in software sales over the system's lifetime... So a $500 Mac Mini sale is as good for Apple as a $2000 PowerMac with 40% margins was 5 years ago.

    Apple will keep innovating the Mac to milk the cash cow... They will NOT enter price-wars or otherwise fight with MS or Dell or HP for market-share. They will milk the cash cow, try to execute and expand markets, but they are NOT interested in growing to a 10% market with the SAME profits as now by cutting their margins by 75% which would make the software developers happy.

    It isn't a zero-sum game, they are selling the iMac or Mac Mini as a digital life system. Sure you have a Windows machine for whatever... but add a Mac Mini and a KVM (and annual OS X + iLife upgrades) to easily put your kid's Soccer Games on DVD and send to his grandparents. That is their "growth" strategy.

    It isn't a bad strategy, but selling easy-to-use digital toys is how Apple is a growth company, and Microsoft is becoming a mature company that will steadily increase its annual dividend.

    Good for Steve Jobs, good for Apple shareholders, and hopefully good for its customers as long as Apple keeps putting out new products that we want to buy because we are the cash cow to be milked, but we aren't going to benefit from price cuts from a price war because market-share and PC growth just don't interest Apple...

    That said, I'm sure at some level Apple sees Linux entering the network market for office networks, and realizes that with the best (and easiest to use) desktop Unix... he can enter that market. If you like Linux, if Apple gets the BEST WINELIB performance, the BEST Qt performance, and best Gtk performance, and has KDELIB and GNOMELIB ported... well how tough is it that Apple is able to compete with Linux for SOME share of the corporate desktop market.

    Apple is in a position to make SOME gains in PC market-share, but growing back to 10-20% over 10 years isn't giant tech growth... the iPod and OTHER SIMILAR projects is.

    It's a smart business move, and Apple has set themselves up to grow profits steadily in their core markets, and then swing for the fences with new products like the iPod, iTMS, etc.

    Alex
    • This is interesting and all, but I have to say that it is really unfortunate if we view a computer company's success strictly in terms of its market share, or even in terms of its profit. If you do, you end up making statements like this:

      The desktop wars are over. Commodity IBM PC-compatibles with Microsoft OSes and Intel chips won.

      I think what really matters is who makes the best product, and in my opinion the success of Apple is in the acheivement of OS X. Now, I am not so naiive to think that the b
      • It isn't about market-share. The win/loss is as follows:

        Businesses care (should care) about the net present value of business decisions.

        If you can establish a monopoly in say, 5 years, like MS did going from 3.1 -> 95, then it is okay to make "okay" profits or even losses for 5 years because the NPV of a 10+ year monopoly is HUGE. Otherwise, market-share is IRRELEVANT, because it doesn't get you monopoly rents.

        Job's doesn't win/lose based on market-share.

        He wins/loses based upon the NPV of future c
  • by doublem ( 118724 ) on Monday July 11, 2005 @08:57AM (#13032396) Homepage Journal
    And all this time I thought putting the "Intel Inside" stickers on the MACs when I was in in college was a cruel gag done to piss off the MAC users. Not I'm a bloomin' prophet.
  • by chiph ( 523845 ) on Monday July 11, 2005 @08:58AM (#13032402)
    My personal theory of what's going to happen over the long term is that Microsoft will discover the benefits of running on a closed hardware device (no more pesky driver problems from marginal hardware makers!) and will port Windows to the Intel Mac where it becomes a best seller.

    Chip H.
  • Bah (Score:5, Insightful)

    by Maury Markowitz ( 452832 ) on Monday July 11, 2005 @09:00AM (#13032426) Homepage
    Is it just me, or are the "insiders" who can't even spell just a tad less than credible?

    Why can't anyone take the announcement at face value? Clearly IBM (and Moto/Freescale) don't want to develop new top-end chips for a small market. Who can blame them?

    But Intel is going to build their next generation anyway. Apple's small marketshare is meaningless in this context, they're in a race with AMD for a huge market no matter what else happens.

    Let's remember that Intel has been courting Apple for well over a decade now. They're also clearly unhappy with the crappy boxes being offered by their existing vendors. Having Apple onboard making cool products with their systems must be a dream come true -- "See, THIS is what an Intel machine can do".

    But no, not enough of a conspiracy in that I suppose.

  • by jav1231 ( 539129 ) on Monday July 11, 2005 @09:06AM (#13032471)
    My Powerbook boots faster than my new Thinkpad. So this could go the other way. Apple fans could find that the Apple hardware my behave considerably different. Even if not, now Apple has to compete with high-end gamer boxes when trying to be the fastest. Perhaps they won't try to be the fastest, but faster than Dell/HP. It's going to get very interesting, to say the least.
  • by nobodyman ( 90587 ) on Monday July 11, 2005 @09:07AM (#13032478) Homepage
    I'm wondering if the 360 has something to do with this, or if it at the very least nudged Jobs over the edge.

    Hear me out. Most people have heard about Jobs' pathological reaction when he loses face, and everyone knows that he *hates* Bill Gates, right?

    So awhile back Jobs' predicts 3Ghz G5's in 2005 (which I guess became the "3GHZ Promise"). IBM fails to deliver. However, Microsoft announces shortly before E3 that the 360 will use a 3.2 GHZ triple-core G5. I can only imagine that Jobs was pissed on some level that Bill Gates trumping him in Apple territory.

    Of course, there have been a few reports that the 360's G5 is essentially crippled, and that the chip will effectively be only twice as fast as the original xbox's cpu. Even if it's true, I don't think that changes anything. Jobs may have figured figured (and I'd be inclined to agree) that even if the 360 chip is not really as powerful as it seems, it represents time&effort that IBM was dedicating elsewhere instead of working on improving it's offerings to Apple.

    In fact, when you consider that IBM is working w/ Sony and Nintendo on other customized G5's, it seems pretty clear where Apple stands in terms of priority. Not that I blame IBM -- why the hell would you care about the rantings of Steve Jobs when you are going to be selling your product to 3 out of the 3 biggest players in the console market, with each one amounting to way more sales that what you'd ever get with Apple.

    Not sure if it's the case, but it sounds plausible enough. At least he kept the promise though, right? ;-)
  • AMD timing? (Score:5, Interesting)

    by Zombie ( 8332 ) on Monday July 11, 2005 @09:09AM (#13032496) Homepage
    I wonder what The Steve will break in a fit of rage if and when AMD's case against Intel results in a ruling that renders the volume deal illegal and void. You'd almost think that AMD (lawsuit) and IBM (PPC announcements, Cell) banded together to flip The Steve the finger after he had already made the decision.
  • by Wdomburg ( 141264 ) on Monday July 11, 2005 @09:22AM (#13032617)
    It's been obvious for a while that the "real reason" is that Apple's needs are met better by Intel's roadmap than IBM's, and Apple doesn't have enough marketshare to make it worthwhile to change that.

    Yes, the new 970FX chips are an improvement over the current tech. On the other hand, it's not mind-blowing compared to Intel's current line-up, much less what's in the pipeline. I'm supposed to be impressed by an announced 13W @ 1.4GHz and 16W @ 1.6GHz when Intel has been selling 10W @ 1.5GHz for months?

    Even the dual-core Yonah core, slated for volume production first quarter of 2006, is quoted as staying within a 25W envelope @ 2.13GHz. Speeds for the low voltage, ultra low voltage, and single core parts aren't released yet, but Intel has made it clear that it's aggressively pursuing lower power designs and that notebooks based on the next generation of chips will "use approximately 33% less power".
  • by Snorklefish ( 639711 ) on Monday July 11, 2005 @09:24AM (#13032640)
    So Jon Stokes' "inside information" is from a guy who doesn't work with Intel, Apple or IBM and a five year old article?

    As to Overshoot's comments, no.

    The 970 wasn't intended to be a "custom processor chip." Had IBM hit its performance targets, it would have had ample alternative outlets for the 970. The great speculation was that IBM would push its own line of inexpensive 970 based Linux servers. But IBM wasn't up to the task.

    And the suggestion that Apple isn't flush with cash? Again, no. Apple's sitting on a mountain of it.

    Finally, Apple, no matter how egotistical its corporate culture may be, would never think itself large enough to bully Intel for volume discounts.

    No, the reason Apple has switched is because marketing told it to stop fighting the dominate paradigm. When the Macintosh runs on the same base hardware as everyone else, marketing can concentrate on the OS and sundry applications. Sure, Intel *probably* sweetened the offer knowing that Apple's cutting edge design would reflect well on it. And the Apple premium will probably justify selling top of the line chips, forcing Dell and the like to buy premium chips for marketing purposes.

    The only thing surprising about the decision to go with Intel is the fact that Apple thinks it technologically and commercially feasible to run on multiple architectures. Once Apple became convinced of their ability to do so, the decision made itself.

    • by Caiwyn ( 120510 ) on Monday July 11, 2005 @10:22AM (#13033185)
      Well said. Ars is a fantastic technical resource, but I don't think they're up to snuff when it comes to business world commentary.

      The reasoning put forth in the article that Apple was too demanding doesn't hold when you consider IBM's "Power Everwhere" strategy. The parent poster is right -- IBM could've pushed the 970 into other markets, but they failed to reach 3 Ghz and couldn't sell it. Calling it a custom job for Apple after the fact is just sour grapes.

      IBM can whine, but they used Apple to catapult themselves to the top of the list for custom processors for things like the XBox and the PS3. Once they had those contracts, Apple was a fish they could throw back. Bait, if you will. Meanwhile, the XBox 360 is water-cooled, and the Cell chip that powers the PS3 is not a viable desktop processor.

      And let's not forget that the PPC970FX is horribly underpowered. Clock-for-clock, the G5 is shows no major real-world performance improvement over the G4. The main reason the G5 is so great is that it hits clock speeds up to 2.7 Ghz. The G4 is a full 1 Ghz behind. But the 970FX, IBM's "low-power" chip, is clocked even lower than the current G4, and its power consumption is STILL higher than the Pentium M. Meanwhile there are new G4 chips out NOW that reduce power requirements even more drastically.

      The only thing the 970FX brings to the table is 64-bit compatibility, which is only necessary if you have more than 2 GB of RAM -- not a likely prospect in a laptop. The fact of the matter is that IBM's "low-power" offering is the weakest of all major chip manufacturers. Even Freescale is ahead of them. Intel is just plain out of their league.

      With that in mind, Apple's reasons for moving to Intel were exactly as they stated -- better performance per watt. IBM couldn't hit the goal, pulled the plug, and is now trying to blame Apple for the fallout in order to save face with other clients.
  • Compiling for Size.. (Score:3, Interesting)

    by delire ( 809063 ) on Monday July 11, 2005 @09:30AM (#13032697)

    Seems to back up this fairly depressing review [anandtech.com] of Tiger/G5 I've just finished reading. Say benchmarkers comparing Tiger to Linux on XEON:
    Mac OS X is incredibly slow, between 2 and 5(!) times slower, in creating new threads, as it doesn't use kernel threads, and has to go through extra layers (wrappers). No need to continue our search: the G5 might not be the fastest integer CPU on earth - its database performance is completely crippled by an asthmatic operating system that needs up to 5 times more time to handle and create threads.


    Top level of the review here [anandtech.com]. Note this review is really only relevant to high load server applications.
  • by Vodak ( 119225 ) on Monday July 11, 2005 @09:48AM (#13032839)
    The Xbox 360, PS3, and the Revolution are all supposed to be powered by PPC chips. IBM Can't keep demand as it is. Alot of time and effort will be placed on the console gaming system chips. Apple had to leave IBM becuse there is no way IBM would have kept up with demand.
  • I call bullshit. (Score:5, Insightful)

    by amper ( 33785 ) * on Monday July 11, 2005 @10:03AM (#13032970) Journal
    This article is so filled with misconceptions, revisionist history, wishful thinking, and downright FUD that it's difficult to extract the few relevant and correct facts from the story.

    Apple not exactly rolling in cash

    WTF? What pocket universe have you been living in? One of Apple watchers' biggest complaints about APPL is that they have been sitting on a tremendous amount of cash for years, when they could have spent some of it to shore up their market position in many, many different ways. I argue that one of the biggest mistakes Apple made was not buying Netscape before Sun and AOL divided and conquered it, or CS&T/Steltor before Oracle subsumed it. Think of where Apple might be today if we had an improved Netscape SuiteSpot running on Mac OS X. What if Apple spent some of those billions in cash developing a successot to the Apple Network Servers to run the above server software? Wouldn't you like to see a product that could absolutely destroy Microsoft Exchange using Internet Standard protocols?

    And, speaking of Oracle, how many years did Larry Ellison sit on Apple's board without producing an Oracle server for an Apple platform? But, I digress..

    Motorola in particular, has written off hundreds of millions of dollars in losses caused directly by the erratic actions of Apple Computer

    Umm, how about..."Motorola in particular, has written off billions of dollars in losses caused directly by the erratic actions of Motorola? Hey, let's just completely ignore MOT's complete mishandling of the entire PowerPC agreement/concept. We weren't stuck at 500MHz because of Apple--it was MOT's inability to make a gracful transition to a new process line that caused *that*. Not to mention Motorola switching all internal operations machines to WinTel and ditching *their own product* in favor of a competitors?

    IBM has other customers who actually pay up front for custom designs and who don't insist on having IBM tailor their product roadmap around a few million units a year

    And how, exactly is the example of one of IBM's "regular" customers in any way relevant to Apple? You may have forgotten that Apple *owns*, at least partially, the PowerPC IP, not to mention the fact that *no other manufacturer* uses PowerPC in a general purpose computing application, other than Apple and IBM, themselves. Yes, IBM has "other customers", but none of these have the same needs or relationship with IBM that Apple has. IBM is doing as much damage to their own product line by not moving the Power and PowerPC lines forward as aggressively as possible, unless of course IBM intends to pawn off their workstation, mini, and mainframe lines to China, as well...

    The bottom line is, no matter how much Hannibal would like to wish it otherwise, IBM screwed up royally, and in the process, screwed Apple and Steve Jobs. You may want to go back and read my Slashdot post from 2005-04-15 to see my evaluation of the possibility of Apple moving to Intel (which , I may add, was well before any speculation/rumors on the part of C|Net or the WSJ).

    May I direct you to http://apple.slashdot.org/comments.pl?sid=146200&c id=12245408 [slashdot.org] ?

    And I quote:

    ...Darwin seems to work just fine on x86 hardware. In fact, it arguably got its start on x86 hardware. The guys at Apple are no dummies--the upper layers of the OS may not be open source, but you can be sure that they are sufficiently abstracted from the lower layers that it would be a relatively simple job for Apple to port to another platform. They might lose things like AltiVec/Velocity Engine, but vector processors are widely available elsewhere.

    For the same reason, I don't buy the argument that Apple will never release an x86 version of Mac OS X--after a

    • by Vitriol+Angst ( 458300 ) on Monday July 11, 2005 @02:52PM (#13035955)
      Can we mod the previous post up to, like 10?

      I am not a reactionary to all things not positive to Apple--but this seemed to be a total miss on what is usually technically astute reporting by Ars Technica.

      One glaring issue that struck me (and I am not a CPU compiler professional; IANCCP), is that Apple was deliberately sacrificing speed for size by compiling for size. Wow. What kind of conspiracy would make that one profitable? More than likely, with the size of cache and the size of RISC instructions (and more so in 64 bit), size is more important to speed because it means you are less often having to read code from a disk. But, what, if anything has this to do with Steve Jobs moving from IBM because of a tantrum?

      Why wouldn't Apple want to have leverage? And, if you can't have leverage, at least know that the company you are with is going the same direction. But now IBM is distracted by games and blades the way Motorola was distracted with cell phones and embedded system. I think Steve learns from his mistakes and he saw that after IBM had Nintendo, Sony and Microsoft-- Apple would not be getting as much service. So I totally agree with the previous post here from "amper". But I think that Steve's ego was less of an issue than what he thought was best for Apple's future (Steve is directed towards his legacy-- I think his poor temper towards fools gets mixed up with arrogance a bit). I would just like to add that it isn't just about costs or laptops or future performance--it's about all those things and probably about things that Ars Technica and the readers of Slashdot can only speculate about. Intel may not make the absolute best chip at every time of the year, but Apple will get to save so much in all the components that make up a motherboard. They can spend more time coming up with great software, and yes, a nice curvy case. From a marketing perspective, it gets rid of distracting issues of price versus performance (which most can't really understand anyway) and let's Apple compete based on a better computing experience.

      But I don't think Intel is all a Panacea. There is a real issue with how Apple will make Windows applications compatible while still getting developers to make applications "Intel/Mac" compatible and not just "emulator" compatible.

      But, I think that Jobs is smarter than that. He is looking at Cell phones and entertainment integration, and realizing that "Device compatible" will be more important to most home users than "Windows Compatible". So my guess is, that Steve will allow Windows applications to play, but only Mac compatible will get to work with iTunes, the set-top box and your cell phone. Steve has given up fighting for yesterday because he has confidence in innovation. I also think that is a win/win for people who stay with the Apple platform. I don't want to have headaches with Win/Tel just to ensure a profit margin.

      IBM is not sitting still--I still think that their upcoming dual core will be a best of class CPU--but I'd be pretty worried if Apple were not involved in WiMax.I'd also like to know if the CELL chip will live up to hype and what it will be compatible with.

      On a related note, did everyone know that Steve Jobs and Wozniak started by hacking set-top boxes? Follow the patents people.
  • Microsoft (Score:5, Funny)

    by paugq ( 443696 ) <pgquiles@elpauer . o rg> on Monday July 11, 2005 @10:11AM (#13033067) Homepage
    Oh, you stupid people, you don't grasp what's really happenning here. I have to tell you everything.

    Apple is turning to Intel because The Evil Empire (AKA Microsoft) will at last buy 100% Apple stock and Mac OS X 11.0 will be the much-hyped Longhorn. :-D
  • Personally, I don't think Apple's decision to go Intel had too much to do with processor roadmaps. Instead, I think it was primarily driven by Apple's desire to ease interoperability with Windows.

    Put more bluntly, Apple is switching to Intel so that Wine and VirtualPC/VMWare will work at full speed. Right now, I know many many people who would switch to a Mac in an instant, except they need some small, vertical application that only runs on Windows. By switching to Intel, Apple gets the opportunity to build Windows compatibility into their OS (using WINE code, customised) and capitalize on that market.

    I'm not looking for this to be good enough to kill the market for native Mac apps (let's face it: emulating Windows is hard)--just good enough to let me continue using the 2-3 windows applications that I absolutely must have to do my business.

    I can tell you this: the instant an Intel-based powerbook is available, I will be buying it so that I can run Windows in VMWare (or equivalent software) and get rid of my Windows laptop at long last. It's a convenience thing.

  • by DesScorp ( 410532 ) on Monday July 11, 2005 @10:39AM (#13033339) Journal
    Ahh, the tinfoil hat conspiracy mongering at Slashdot.

    While I'm sure Intel chips will cost Apple less than the IBM chips, and could lower their costs, this wasn't about price. This was about saving Apple from death in the PC business.

    Fact: despite the early promise of PowerPC, Intel's offerings are beating the dog shit out of that line. There's no comparison in performace. Yes, PPC does more work per clock cycle, but they're so far behind in terms of clock speed that it doesn't matter. There is no megahertz myth here. Clock speeds DO matter. And no one making PPC chips, Freescale nor the mighty IBM, can keep up with Intel. For PCs, Intel is the king . AMD makes some better desktop offerings, has some better prices, but doesn't have Intel's product range, especially in laptops.

    Make no mistake...while OSX is the best PC operating system on the market, the supporting hardware was starting to suck. Compared to the PC world, most of Apple's offerings were stuck in late-90's levels of hardware performance, while charging a premium price. Is it any wonder that some anaylists were predicting a drop of Apple's market share to around 1.5 percent by 2008?

    Apple did this so they could be a viable competitor. That's it. Intel has better chips, especially for portables. No one makes anything as good as the Pentium M for laptops. Not AMD. And certainly not IBM. Big Blue was never going to get a G5 into a Powerbook anytime soon. And when they did, it would still lag performance-wise (especially in battery usage) compared to it's Intel rivals.

    Apple cannot survive at their present size on Ipods alone. This was a cold, calculated decision by Jobs and Co. to get competitive again. You can now take off those foil hats.
  • Lame (Score:3, Funny)

    by umijin ( 882948 ) on Monday July 11, 2005 @12:10PM (#13034205)
    This is a lame excuse. Steve was just in a hissy fit, decided to break up with IBM, and now IBM has just made a liar out of him, perhaps for spite.
  • The OS Xperience (Score:4, Interesting)

    by jafac ( 1449 ) on Monday July 11, 2005 @01:16PM (#13034926) Homepage
    My bet is that the move had something to do with Intel's DRM, and making the Music Industry happy - since Apple's focus now is iPod/iTMS.

    Also, each iPod sale is a potential "switcher". iTunes is available for Windows, yes. But each iPod sale is a person who may be curious about OS X, might actually buy an iMac, or Mac Mini. (the Mac Mini is aimed at "switchers" - who already have a keyboard, mouse, monitor, but want to front a minimal investment to switch platforms, just replace the CPU.)
    But what if iPod potential "switchers" can't be supplied with enough PPC-powered Mac Minis, or Mac Minis are still a tad too costly, or what if Apple can't slip a powerful enough chip into that enclosure due to heat issues? The switch to Intel chips solves all of these issues. The difference between a Windows iPod/iTMS user, and an OS X iPod/iTMS user? The OS X "experience" - the same schlock any cross-platform software producer can do: make their Native version better than the ports. Like IE Windows compared to IE Mac. iTunes Mac will be kept more up to date with features than iTunes Windows, and it will only cost an iPod/iTMS user a couple hundred bucks to switch. And with Intel chips, they can ramp volume to meet demand now.
  • Comment removed (Score:4, Informative)

    by account_deleted ( 4530225 ) on Monday July 11, 2005 @06:57PM (#13038117)
    Comment removed based on user account deletion

A committee takes root and grows, it flowers, wilts and dies, scattering the seed from which other committees will bloom. -- Parkinson

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