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The 'Book Beat

Apple, IBM, and Intel: The Choice Was Clear, and the Transition Says a Lot About Apple

- 2006.02.13

In last week's column, I wrote about several parallels between the launch of the MacBook Pro and the PowerBook 5300. Apple has been burnt in the past and should avoid most of the mistakes made in that initial transition. However, there's more to the Intel transition than first meets the eye.

The Obvious

When Steve Jobs stood up and announced the move to Intel, there was one very obvious reason why - the G5. Powerful as the chip was, there was no way it would find itself in a laptop any time soon.

In the run up to the announcement, I was selling Macs, and every single day I had to explain to people that (a) I had no secret knowledge of when there would be a G5 laptop and (b) it was unlikely to be any time soon because you just needed to take a look at the cooling system in the Power Mac G5 to realise this was not a laptop processor.

Apple's sells more laptops than desktops, and their laptops were falling behind, technologically speaking.

The IBM Factor

When Apple started working with IBM processors, it seemed like a miracle - Motorola's lack of commitment to developing a G5 had seemed to doom Apple, and suddenly processor clock speeds were climbing again.

Then news of the new Cell processor began to filter through, and also the fact that Microsoft were using Power Mac G5s to develop the new PowerPC-based Xbox 360.

Surely this was good news, because it showed the industry was picking up on the design which Apple had been using all along.

Or not.

The PowerPC architecture is great for powerful processing, but not for energy efficiency. The new PowerPC game consoles would all be mains powered, and they would sell in far greater numbers than Apple's computers.

Did IBM invest in fast chips with bulky cooling units stuck with huge sales guaranteed or low power consumption for a relatively small customer? IBM's choice was clear.

IBM was committed to the G5 and PowerPC. It just wasn't prepared to tailor that commitment to suit Apple.

The Move Was Inevitable

So, seeing how critical laptops are to Apple's business, and that there was no future processor path, it became clear that Apple had to leave the G5 behind.

Look at Steve's keynote speech - the Intel versions of OS X and iLife had always existed. Apple had known this day would come and had been prepared. If IBM hadn't developed the G5, we would probably already be using Intel Macs, which would have been introduced sometime after the G4.

IBM only delayed the inevitable by producing the G5.

Used to Changes

Transitions of one kind or another are familiar to Apple. There were the moves from 680x0 to PowerPC processors, from SCSI to IDE, from Apple's unique 15-pin video port to VGA connectors, from ADB to USB, from OS 9 to OS X, from Apple's special ADC plug to industry standard DVI video connections, and more.

At each change, Apple was accused of losing its uniqueness, yet many say that today's Mac's are as unique in look and feel as ever they were.

Windows has many elements of the Mac interface, but the experience is not the same. This isn't the time or place to debate Windows vs. Macs, but it's worth noting that the Mac experience is not defined by the hardware. The hardware is part of it, but it's not the heart of it.

An Important Message

For years, Apple have been the underdog. Even with the phenomenal explosion in sales over the last couple of years, market share still remains around the 2% mark, a point which Paul Thurrott has keenly kept track of (see Preliminary Mac Market Share for 2005: 2.28 Percent).

Apple's small market share undoubtedly made IBM choose to invest in chips for mains powered game consoles instead of laptop CPUs, since there was much more money in the desktop and console route.

Apple knew that moving to Intel would be controversial, and it's not a decision they made lightly. Intel chips had been stuck in the 3.2 to 3.6 GHz range for years, but Apple liked the direction the Intel planning to moving in. That direction was low power consumption and multiple core processors. More bang for your buck.

We've yet to see how the Intel transition goes, and I'd say we're in the trickiest part right now. Buy now, or wait and see?

I'd like to see Apple switch all their machines to Intel over the next six months and dramatically reduce the price on old PowerPC stock, simply to get the period of uncertainty over with.

But if Apple pulls through the transition in anything like the bullish form we see it in today, an important message has been sent. Microsoft Windows is dependent upon the x86 architecture, which is quite understandable since the processor is the heart of the machine. But Apple will have shown that they are not constrained by hardware. They won't make another transition like this one lightly, but they will have shown the commitment and drive to make it work.

IBM neglected Apple's needs, so it lost them as a customer. IBM probably thought Apple had nowhere else to go, but they were wrong. Intel now knows that Apple expects to be taken seriously. And, perhaps most importantly, let's not forget AMD.

To move from Motorola 680x0 to anything different needed a major rewrite of everything. To move from PowerPC to another architecture also needed a major rewrite of everything.

However, to move from Intel to either AMD or VIA hardware - well, it needs almost no effort by comparison. Intel has a new customer, but if the agreement turns sour, Apple can quickly move elsewhere without any of the uncertainty the current transition is causing.

The announcement of the move to Intel was a shock, and the next few months will hold some uncertainty for Apple. But once we're through this transition, Apple will be in an even stronger bargaining position. LEM

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