Steve Jobs announced this morning that Apple's agreement with IBM for PowerPC processors will be phased out. Instead, the company will begin purchasing computer processors from chipmaker, Intel.
“Apple said it would move all of its flagship Macintosh computers to Intel processors by the end of 2007.“ -Fox News
From a business perspective, this move makes perfect sense. Many computer “geeks” will bore your socks off with explanations of how “RISC” is better than “CISC.” Mac fans in particular will argue until the sun goes down that PowerPC-based systems are faster than Intel-based systems. It does not matter. In business, theoretical advantages mean little to nothing.
The bottom line is fairly easy to point out. IBM sells fewer chips than Intel overall. Additionally, Intel has direct competition from AMD. What this means, is that Intel is driven to improve its products, and because its market is so large, it is able to offer its processors for less money. I should also mention that IBM has had difficulty meeting Apple’s demand for processors in the past.
Today’s computer market is growing more and more into the Intel architecture, despite the complaints of the self-proclaimed geeks. When Linux was released, one of its original goals was to be “UNIX for x86.” In other words, UNIX that runs on common Intel-based PCs. The trend in UNIX machines today is towards Linux on Intel CPUs. All other processor formats show declining sales in the PC and Server computing markets. Microsoft dropped support for a number of alternate processor architectures many years ago.
Steve Jobs has traditionally boosted Apple through flamboyant and eccentric statements, as well as the release of trendy or hip products. This time, Jobs is making a sound business decision that is relatively low-risk. What will Apple gain?
Less expensive parts – From CPUs to motherboards, to other integrated controllers. Apple computers will now run on a hardware platform that can compete at the same price level as the rest of the PC industry.
Reliable supplier – Intel is a valuable supplier, able to meet tremendous demand at highly competitive prices.
Alternate suppliers – Because AMD competes directly with Intel, Apple now has a choice of CPU manufacturers, and has the added advantage of multiple suppliers.
DRM – Yes, that nasty DRM word. Some of us love it. Others, like Brian J. and The Listless Lawyer appear to think that DRM is a dirty word. Digital Rights Management, or DRM, was invented so that you could create digital content, and then control its release into the market. Other companies will do this too, especially Hollywood companies. Yes, as a result, it will become more difficult to collect and use illegal content. So whine and complain all you want, but the efforts by Intel to include DRM functionality at the chip-level is exactly what is needed to keep the commercial market healthy for digital content. Bummer about your illegal MP3 collection. Cry me a river. And quit stealing. Now that Apple has access to a valid DRM solution, Apple computers will be less likely to end up as the choice for thieves and hackers.
An Enormous Market – Here is the real advantage. Apple can now sell products to a much larger market. When the Apple operating system runs on Intel CPU’s, it can be marketed as an “affordable upgrade” to each and every Windows user in the world. No longer do you have to make the investment in Apple hardware to get the purported advantages of the Apple operating system. Apple no longer sells “full-featured computers.” They now sell computers and operating systems. In addition, customers may now be able to buy Apple hardware to run Windows.
Of course, many Mac fans will be crying themselves to sleep for a week over this news. They have been defending the Apple platform and criticizing the PC platform for so long, they no doubt feel betrayed. If you haven’t realized it yet, many Mac fans have a religious fanaticism about their computer choice.
Ever since the rumors hit the street, people have been claiming that it won’t happen. Of course, those who understand business are excited. Apple shares were up before the weekend on rumors (discounting the losses attributed to an oversized iPod stockpile), and are responding favorably to the news.
This news was first seen at: Fox News
W.S.
So, who can we pick on today? Here are a few of the geniuses who suggested that the rumors were not true:
The Register – Why Apple won’t embrace Intel – a forbes article
ZDNet Blog – Open Source writers at ZDNet… what do you expect?
Cult of Mac – A blog at Wired Blogs
The Motley Fool – The name says it all, this time.
Ferret.com – an article by Jessica Davis (Electronic News)
Unwired – A poorly conceived alternative suggestion by John Yunker
Gizmodo – Blindly accepts the Cult of Mac theory
MacHELP – Claims it to be a “disaster of biblical proportions”
Michael Schakow – As it says on the site: “Occasionally Thoughtful”