Posted on 06/06/2005 10:54:57 AM PDT by Ernest_at_the_Beach
SAN FRANCISCO (MarketWatch) -- Apple Computer Inc. said Monday that it will begin using microprocessor chips made by Intel Corp. in its signature Macintosh computers beginning next year, ending a longstanding relationship with International Business Machines Corp.
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Apple
(AAPL: news, chart, profile) made the announcement as Chief Executive Steve Jobs delivered the keynote speech at the company's annual conference for software developers in San Francisco.
"Our goal is to provide our customers with the best personal computers in the world, and looking ahead Intel has the strongest processor road map by far," Jobs said in a statement released at the start of his talk.
The chip transition is a stunning about-face for Apple, which has fought a long, mostly uphill battle against competing computer products that run on Intel (INTC:
chips and rival software from Microsoft Corp.
The switch to Intel likely will allow Apple to lower prices at a time when it is trying to boost its meager share of the PC market by capitalizing on consumers' devotion to the company's iPod digital music player.
However, by embracing Intel after years of railing against its dominance of the PC market, Apple risks alienating its famously loyal base of users and developers.
"The most visible risk is that there could be some pushback in the developer community, as the move would require programmers to rewrite some applications," Piper Jaffray analyst Gene Munster wrote in a research note.
Still, Munster predicted that the long-term gains from the new partnership will outweigh any "short-term pain."
Using Intel will give Apple a consistent supply of chips, bring the price of Macintoshes more in line with its competitors and reach a potentially larger developer community, which would lead to more commercial applications for the Mac, according to the analyst.
Effects on IBM
The Mac maker's switch signals a shift in the fortunes of the chipmaking unit at IBM
, which has manufactured Power PC processors for the Macintosh for more than a decade.
Apple reportedly has been upset about Big Blue's inability to engineer a next-generation chip that can be used in its notebook computers. Desktop Macs run on the powerful G5 product, but the chips generate too much heat to be used in PowerBook and iBook laptops.
Apple uses the so-called G4 chip, manufactured by Freescale Semiconductor
(FSL:
news, chart, profile) , for its notebook computers and the Mac mini PC. Freescale shares fell on the report, even though Apple sales represented only 3% of the company's 2004 sales of $5.7 billion.
According to the CNET article, Apple would shift its lower-priced computers such as the Mac mini to Intel chips in mid-2006 and higher-end machines such as the Power Mac in mid-2007.
IBM sold its own PC unit to a Chinese rival late last year, and has had recent success with its non-PC chips, some of which are being used to power Microsoft's Xbox video-game hardware.
Representatives for Apple and IBM could not be reached Sunday for comment. Intel and Freescale said they could not comment on what each referred to as "rumor and speculation."
Reports of an Apple-Intel partnership lit up Internet blogs and message boards on Sunday, with reports that Apple apparently is targeting laptops and the development of its rumored portable Tablet PC, and that an Intel alliance could be a means to capturing greater share of the computer business.
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"As a dedicated Mac fanatic since 1987, I don't care what chip is in the box as long as it's doing the job and helps Apple to develop the platform." -- Elise Bauer Pacifica Group |
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Building on iPod momentum
Apple has made great strides toward that goal with its breakout iPod digital music player. Earlier this year, Morgan Stanley estimated that iPod users switching to Macs from PCs could boost Apple's share of the global computer market to 5% from 3% in 2005.
Yet a pact with Intel would come at a time when iPod sales appear to be slowing. Goldman Sachs said in a research report Thursday that iPod shipments could be flat this quarter.
Also last week, Apple settled a customer class-action suit over the iPod's battery life that could cost $100 million or more, involving one of the first three generations of the iPod. See full story.
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On Friday, Shares of Apple Computer lost $1.80, or 4.5%, to $38.24.
Testing brand loyalty
The switch also could pose some significant product branding issues that could hurt Apple in the short term, according to some analysts.
Apple's biggest hurdle could be appeasing its dedicated, often fanatical customer base, which could recoil from seeing an "Intel Inside" sticker on a Power Mac.
"The world associates Intel with [Microsoft Corp.'s
(MSFT:
news, chart, profile) ] Windows," said Elise Bauer, a partner at the Pacifica Group in Livermore, Calif., which provides strategic marketing consulting to technology companies.
"Intel is coupled with Windows to the point where we call it a 'Wintel' box. If Apple is now embracing Intel, then there's some rebranding for both companies, Intel and Apple, to do around that. Now you'd have 'Mactel' and 'Wintel.' The branding challenge for both Apple and Intel is to create a distinction," she added.
What's more, software developers would have to rewrite software applications to maximize the performance of the Intel processors.
Still, most Mac users' loyalty may be solid enough that Apple effectively can do no wrong, Bauer suggested.
"As a dedicated Mac fanatic since 1987, I don't care what chip is in the box as long as it's doing the job and helps Apple to develop the platform," she said. "What I care about is that Apple stays in business and continues to thrive."
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Jonathan Burton is MarketWatch's investments editor, based in San Francisco. |
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Pinch me I must still be asleep.
I certainly don't have a goatee...
Every 4th year, you get your machine for one day to do what you like, no questions asked.
You'll need some sort of proprietary ROM chip that only Apple machines will have. I suppose Intel could just build the Apple ROM onto their own chips, but they won't have to.
I read today that even the developers' version of the Intel-based OS X, which will be sent out in less than two weeks, is going to ship out with some sort of hardware you'll have to plug into the PC in order to make OS X load.
Based on what? you have already shown oyu have no real desktop experience on a Linux box, and still bother to install apps without the benefit of modern installers..
Per Apple execs, they will not be licensing OSX for use on non-Apple hardware. Easy enough to control with ROMs, like they did for the Apple II.
Do you think this would make running Windows-compiled programs from inside OSX faster and easier?
Rather than a Powerbook, I'm probably going to pick up an iBook and wait for the Pentium M-powered notebooks to come next year.
Thanks, I had just seen this on Cnet. At least for now, apparently nothing has changed except the internal chip on Apple Macintosh.
Do you think this would make running Windows-compiled programs from inside OSX faster and easier?
Yes, especially software that runs at assembly level. One specific product that should have immediate improvement is Java for OSX, which has notoriously lagged the Intel implementations.
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Its official. After years of speculation and proclamation, Apple has announced its impending shift to x86. Once upon a time, I'd have hailed this as a tremendous step forward for the company--now I'm not so sure.
Using Intel processors will probably cut Apple CPU costs since they'll (presumedly) be buying only-Intel hardware, and will have access to Intel rebates and cost discounts. It may even be a selling point Apple can leverage to increase the ease-of-switching--Apple has announced that their PC's will run Windows perfectly, though they won't ship the OS themselves. There are, however, significant issues and problems I'm not sure how Apple will overcome.
The Emulation Issue:
According to the keynote, Apple will provide a 'revolutionary' code-translation system named 'Rosetta', which will enable PPC software on x86 hardware, with only a minimal performance penalty.
Right. I'll believe it when I see it.
If we step back from Apple's marketing claims and examine the reality of emulation, the evidence is undeniable. Performance hits from emulating other CPU architectures are always significant. True, the architectures involved make a difference--the PPC is much better at emulating x86 and maintaining an acceptable level of performance than Itanium or Transmeta's Crusoe--but "maintaining an acceptable level of performance" and "minimal performance penalty" are not at all the same thing.
Apple's transition to PowerPC from 68K processors is typically held up as an example of an architecture transition where emulation smoothed the gap, but that comparison isn't accurate in this case.
Compare the fastest 68K system Apple ever shipped and the first PowerPC (the Power Macintosh 6100, according to Apple-History.
Macintosh LC 575:
CPU: Motorola MC68LC040
Speed: 33 MHz
FPU: None, Available via Upgrade
Bus Speed: 33 MHz
Data Path: 32 bit.
L1: 8K
L2: None.
Macintosh 6100:
CPU: PowerPC 601
Speed: 60/66 MHz
FPU: Integrated
Bus Speed: 33 MHz
Data Path: 64-bit.
L1: 32K Unified
L2: Optional, 256K standard on 66 MHz version.
By May of 1995 (just over a year after the LC575 was released), Apple had released the Power Macintosh 9500, based on the PowerPC 604 core. This new core offered improved branch prediction, a split L1 cache, improved pipelining, and higher frequencies--it made its debut at 120 MHz, with a 40 MHz FSB.
The point to this comparison is that Apple's PPC transition enabled the company to offer CPUs and systems that dramatically surpassed what was available from 68K, not just in terms of frequency, but across multiple factors. Not only were PPC CPU's faster, they were more efficient, increased effective memory bandwidth, and increased the amount of available L1 / L2 cache--and they did all this within one year of the transition.
Transitioning to Intel now, however, can't possibly offer these types of improvements, and there's no word yet on how the lack of AltiVec capability will impact performance. I'm sure some operations handled by AltiVec can be handled by SSE / SSE2 / SSE3 instead, but again, there's a translation penalty there. Will "Rosetta" be capable of deconstructing PPC code and reconstructing it into x86-compatible code while simultaneously vectorizing it on-the-fly? Again--I'll believe it when I see it.
I don't see any way for Apple to transition its software easily. Rosetta or no Rosetta, this move is going to be rough.
The Marketing Factor:
Ever since the G3 hit a frequency wall, Apple has been pushing twin concepts of CPU efficiency and "Intel's MHz myth." For nearly five years, they've publicly attacked and attempted to humiliate x86 in general and the Pentium 4 in particular--and Mac users ate it up.
Evidence of this anti-x86 bias is clear, even in our previous discussion on the topic. Hit with news that Apple really *was* switching to Intel hardware, Apple faithful denied the possibility, floating increasingly-unlikely alternatives where Apple licensed Intel to make G5's, Apple commissioned Intel for a non-x86 processor, or Apple was going to adopt XScale for desktop / high-end notebook use.
Its not something I can easily quantify on paper, but I can't see Mac faithful taking well to this announcement. I'm not going to predict a mass exodus or uprising, but I'm also not at all sure how Apple's going to deal with its unhappy PPC users.
The G5: From Awesome to Anchor:
So what happens to the G5 now? Even Tiger, aka OSX 10.4, hasn't completed Apple's gradual transition to a fully 64-bit operating system, and there are still notable limitations on what can and can't be done in 64-bit. (Ars has more details on this here).
How much further enhancement and improvement will we see for the G5? Apple has announced that an x86 version of OSX has always been maintained and kept running, but is that version fully optimized for SSE / SSE2? Is it fully 64-bit native?
On the one hand, Apple needs to reassure PPC owners that their investments are not wasted, and that full G5 support and development will continue. On the other, its impossible to underestimate the need to begin working on x86 software development. Again, you can't trust marketing here. AMD boasted to us years ago about how Microsoft was able to boot Windows in a 64-bit environment after only a few days of work--but it took years for the 64-bit edition of Windows to hit the market. Even now, performance lags in some areas, simply because of driver and software support.
The amount of code that'll need to be updated, recompiled, and re-optimized is mind-boggling, and while much of it may lie outside Apple's purview, end-customers aren't going to care.
What impact will this have on present-day G5 sales? Its impossible to say. But it does leave me wondering if Apple has any intention of bumping Powerbook speeds again over the next year, or if they've simply given up on any hope of a low-power G5. I suppose a 1.8 GHz G4 might be possible, but its hard to see IBM putting out much effort to bring out products that Apple isn't planning to use.
Conclusion:
Two years ago, when the G4 was stalled and the G5 was AWOL, I thought it made sense for Apple to jump for x86. Now I'm no longer sure. Steve Jobs has always been willing to do the unexpected and take risks in order to stay one step ahead in the industry, but the timing of this announcement feels off, and it runs directly counter to everything Apple has preached about its own hardware for years.
Those of you who own Macs now, or who were thinking about buying them--how does this affect your plans?
Apple Goes with Intel: Anticipating the Other Shoe and Looking Ahead
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Apple Goes with Intel: Anticipating the Other Shoe and Looking Ahead
By Rob Enderle
June 6th, 2005
Apple announced today that they had been anticipating the move to Intel from the moment Steve Jobs returned to the company with a version of the OS ready to make the move. To the Apple loyalist, this has to come as a massive blow; during all of this time Steve and Apple have been adamant that the PowerPC was vastly better than the x86. Had any of them read the recent unauthorized biography, iCon Steve Jobs: The Greatest Second Act in the History of Business, they likely would have been able to better anticipate this and subsequent moves.
Steve wants desperately to take Bill Gates’s position as the most powerful technology guy on the planet. He can’t get there with Apple (or actually with any hardware), which suggests that the “Other Shoe” will eventually be the move away from PC hardware into a software-only pure play. This would allow him to enjoy similar margins to what Microsoft enjoys and, as he believes (and has often demonstrated), he has a better idea of what users want in a product than Microsoft does.
This will clearly put massive pressure on Microsoft to deliver their new operating system on time, as it will face a renewed Apple on Intel in 2007. This would not only avoid the blood bath that Apple enjoyed during the Windows 95 roll out; it has the potential, if executed sharply, to reverse it.
Looking Ahead to 2006
The next two years will be particularly difficult for Apple. Already we are seeing reports of building iPod inventories as the “coolness” of the product declines with age. This decline was apparently helped by the iPod Shuffle, which people, particularly kids, thought of as a “poser” product, detracting from the exclusiveness that made the overall line so attractive and popular. The iPod line has been, for the most part, carrying the company through some difficult times, and if that revenue continues to decline, it could return Apple to unprofitability and put massive pressure on the executive team to make a series of short term decisions—one of which could be to reverse the move to Intel.
On the PC hardware side… if you’re a company called Osborn, you don’t announce new hardware long before it is available (otherwise, people stop buying what you do have and that can crater hardware sales.) In this case, while some will show up in 2006, most of the high margin products won’t show up until 2007, which will make the second half of 2005 and most of 2006 particularly nasty unless Apple can bring another market winning product in to cover the gap.
Such a product is possible; certainly the market is not really taken by the Sony PSP, which was the heir apparent for the next cool thing (largely thanks to Sony), and the Xbox really falls into another class of product. Still, coming out with hit after hit can be problematic, and the Shuffle appears to have been more of a problem than a help here. However, if any company can do it Apple probably can, though betting on it remains incredibly risky given the stakes.
Looking Ahead to 2007
In 2007, Apple and Microsoft will be pitted against each other on similar hardware, both with strong Intel backing. This has never happened before and, as noted above, it could potentially not only offset what likely would have been a market share bath reminiscent of 1995, but reverse it. Microsoft’s next generation OS will be two years late at launch and it is already being positioned in the media as little more than a minor patch over Windows XP.
While it will clearly be more than this, the media has long been anticipating a viable challenger to Windows, and Linux simply has not lived up to this challenge in a general sense. The MacOS does have this potential and it could be a powerful (and much more acceptable) alternative to both Linux and Windows in 2007, if Apple can execute sharply.
Overall, this will be an incredibly exciting time for Apple, Linux and Windows, as competition will force all three to improve at an increasing rate; this has to be good for consumers, assuming that quality isn’t compromised by the process. For Apple, they may want to remember that “What doesn’t kill you only makes you stronger,” and for Microsoft, it may be a case of Apple being back and “boy, are they pissed.”
I don't even own a goat, much less one of them high-priced French goatees. :-)
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- Keynote ends. [11:05 am]
- Jobs says to create Universal Binaries. 90 of+ presentations on Universal versions. 100+ Developer workstations in 7 labs. 500 engineers onsite at WWDC. Next year will be about Leopards, the next version of Mac OS X. More than processor, hardware, the "soul of the Mac" is the operating system. [11:05 am]
- Intel is passionate about their products, according to Steve Jobs. Intel CEO Paul Otellini invited on stage to talk about Apple's transition. "The world's most innovative computer company has teamed up with the most innovative chip company." Otellini plays "Toasting the Pentium" commercial from 1996. [11:00 am]
- Launch of Microsoft Office 2004 was best product launch for Mac OS X. New version of Messenger due for Macs in the next few months. Additionally, a new update for Exchange users. MacBU commits to delivering a "Universal Binary" for Microsoft Office. Jobs also invites Bruce Chizen of Adobe on stage to talk about Intel-based Mac transition. Adobe says it is committed bringing its applications to Intel-based Macs. [10:52 am]
- Apple will offer a Developer Kit, which includes 3.6GHz Pentium 4. OS X 10.4.1 for Intel (preview release). Order today; available in two weeks. [10:48 am]
- Rosetta is a dymanic binary translator. Runs PowerPC code on Intel-baesd Macs. Transparent to users. Pretty fast. Jobs demos Rosetta used to run PowerPC macs on Intel-based Macs. Jobs shows Microsoft Excel/Word running on Intel-based Mac (without any porting and/or recompiling). Jobs also shows Photoshop CS2 with all plugins that are translated and run on Intel-based Mac without significant speed decrease. [10:46 am]
- Jobs introduces Wolfram's CEO, who said they ported Mathematica 5 to Intel-based Macs in 2 hours. Working version in 2 hours flat. Only about 20 lines of code changed. [10:40 am]
- Widget/Scripts/Java --> Just work. Cocoa --Xcode (tweaks, recompile) --> A few days. Carbon - Xcode (twek, recompile) --> A few weeks. Carbon Apps --Metroweks -- Jobs says to transfer to Xcode. Over half of 100 developers using Xcode. Nex Xcode 2.1 delivered today. News Xcode generates a single "universal binary" that supports both processors. Available to everybody at registration desk following the keynote. [10:37 am]
- Mac OS X has been leading secret double life. Every Mac project build for Intel and PowerPC and Intel. Every release of Mac OS X has been built for both Intel and PowerPC-based Macs. For the last 5 years. Mac OS X is cross-platform by design. Apple's demo is on an Intel-based system. Jobs shows all Mac OS X Tiger features are already compatible with Intel-based processors. Not done yet. Will put into the developer hands to help Apple finish it. [10:32 am]
- Two major transitions for Mac: 68K to PowerPC. Next Mac OS 9 to Mac OS X. Now time for third transition. Transition to Intel-based Macs. Developers Now. Next year for users. "Because we want to make the best computers for our customers." No G5 PowerBook yet. Future products can't be build on IBM of PowerPC. Intel has performance and better performance per watt. Intel delivers much better performance per watt. Starting next year the first Macs with Intel processors. Shipping by next WWDC. Mostly complete by 2007 WWDC. Complete by the end of 2007. Two-year transition. [10:28 am]
- Panther 49%..Tiger 16%..Jaguar 25%....early 5%...Expecting Tiger to grow 50% of base by same time next year. Apple has released 5 major versions of OS in last 5 years, while Microsoft has released one (XP). Leopard, next major relase of Mac OS X, due at the end of 2006, alongside Longhorn release. [10:26 am]
- Apple this week says it will deliver the 2,000,000 copy of Mac OS X Tiger. In under 6 weeks since its released. 400 dashboard widgets available since it is released. Jobs demos a few Dashboard widgets. [10:21 am]
- Jobs touts Mac OS X 10.4 Tiger. One billion copies of QuickTime shipped. QuickTime 7 preview available for Windows today. Jobs quotes various glowing media reviews of Mac OS X 10.4 Tiger, highlighting Spotlight. [10:18 am]
- Mac doing very well. PC growth rate is around 10% today . 9 months ago Mac growth rate took off. [10:16 am]
- Apple will build in Podcasting support into iTunes. Easy/quick listing of Podcasts right into iTunes. Subscribe podcasts, download old podcasts. Jobs demos Adam Curry podcast. Artwork in iTunes window changes as you scrub podcasts. Jobs said that new iTunes would take podcasting mainstream. [10:16 am]
- End of last quarter 16 million iPods sold. 76% marketshare of all MP3 players. 430M sonds sold and downloaded. 82 percent iTunes marketshare in the month of May. Podcasting is exploding. "TiVo for Radio." "Wayne's World for radio." Hottest thing going for Radio. Over 8,000 podcasts right now and growing very fast. [10:12 am]
- Apple shows retail video. 109 stores. 1 million visitors per week. Retail/Online stores have sold half a billion in products. "Best Buying Experience in the World" [10:07 am]
- 3800 attendees. largest in last decade. 45 countries including China. 110 lab sessions. 400+ entries for Appple Design Awards. Over half-a-million ADC members. 109 stores. 1 million visitors per week. Retail/Online stores have sold half a billion in products. [10:07 am]
- 9:55 am PT. Live Keynote coverage begins soon.
- 9:20 am PT. Testing Service.
- Event begins at 10 am PT. Please check back soon.
Column: AMD; Down On It's Luck Again
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Why? Synchronous Multi-Processing was running on PCs before Apple started doing it.
Although it was never really used except on high end machines and servers.
Since Apple appears to be taking the final step to being a ApTel to everyone else's WinTel, I would think embracing SMP in their switch to Intel would help them in the PC market.
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