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Sorry, pure guess is wrong.

IBM has a large chip business, and with Cell processor is putting more behind it. They sold PC hardware because it wasnt making good enough margins, and they are now in the business of being a 'technology' supplier to companies liek DELL.

Moreover, Freescale wants to sell chips and would be happy to supply 100% of Apple's needs if IBM didnt want to. (Currently Apple takes Freescale's G4 and IBMs G5). It was an Apple decision, not an IBM/Freescale decision.

The way I see it, it only makes sense in this perspective: If Apple made this decision 20 years ago, we'd have gotten a viable competitor to Microsoft.

Apple must be thinking that their hardware margins are effectively 0%, and they can compete on their software basis. If that is the case, you should be able to but an "OS X" software package and put it on your own PC box.

That *or* they feel the desktop is becoming less and less relevent.

IMHO, this decision is not right - they are missing the boat on the OS wars, and they are also missing the key value differentiator they have in a closed box solution. 20 years ago, this would have been the right decision. Now, when by their own admission the CPU / OS layer is more flexible *and* you have "OS X"-like OS available on x86 ... LINUX ... this is throwing away some real Mac advantages and putting them in direct competition with more low-cost alternatives.

Mac OS X on Intel sounds a lot like Solaris/x86, which ended up going nowhere.

Thanks for the update, haven't paid much attention to them in the last couple of years after they closed half their chip plants and yet still managed to lose $389 million in that operation for the year as well as sell off their HDD division. What were their profits from chips last year?

I would find the task of supplying drivers for the diverse number of add-ons for the PC to be daunting, if they go that direction it will be interesting to see how they survive the "your OS doesn't work with my off-brand/legacy video card" crowd.

Apple must be thinking that their hardware margins are effectively 0%...

I don't know where you'd get that idea. There is no indication that Apple is hurting in hardware or software sales. Quite the opposite. 400 + Apple design awards, 500,000 Apple developers selling over $500,000,000 in product through Apple retail and online 109 Apple retail stores serving 1,000,000 visitors per week, 2,000,000 copies of Tiger shipped in 6 weeks, fiscal 2005 second quarter ended March 26, 2005 posted a net profit of $290,000,000, shipped 1,070,000 Macintosh units, shipped 5,311,000 iPod units, for a 70 percent revenue growth and a 530 percent increase in net income.

There is also no indication that Apple on Intel means Apple on eMachines. If they took that approach, you are correct, they will have kissed their hardware sales goodbye as well as their 109 retail outlets. Again, however, there is no indication that they are about to do that.