More on Apple/Intel
Tags: Apple, IBM, Marketing
Today's Wall Street Journal has another article on Apple's possible interest in Intel chips, this time regarding its effect on IBM's chip business, who is the current Apple supplier for G5s. The theory being passed around over the past day is that the discussions with Intel were really about putting pressure on IBM to supply Apple a better deal on its chips.
There is no question Apple wants both faster and better chips to power its computers. But one section of the article really destroys the idea that Apple might go with Intel Pentium processors:
OK, so lets play this scenario out. Apple is currently one of IBM's premiere customers. It is using a processor that has the same architecture as that being used in all three gaming consoles; in fact, Apple G5s were used for all the Microsoft XBox 360 demos being played at the E3 conference last week. And as IBM produces more processors with that architecture, IBM's chip volumes will rise, and the prices for the chips will fall. Apple ends up in fat city, with higher margins for its products, or the ability to cut prices, or both.
Compare this with the Intel scenario. Apple jumps ship from IBM where it is the second or third most influential customer to a vendor where it would be about 10th in line and have no influence. When Intel introduces a new processor, would Intel ship first to Dell or to Apple? It just doesn't make sense.
The bottom line: Apple isn't going with any other processors for Macs. But what everyone should be looking for is what new products are coming where the processor doesn't matter. And that's an area where the competition between IBM and Intel makes some sense.
Today's Wall Street Journal has another article on Apple's possible interest in Intel chips, this time regarding its effect on IBM's chip business, who is the current Apple supplier for G5s. The theory being passed around over the past day is that the discussions with Intel were really about putting pressure on IBM to supply Apple a better deal on its chips.
There is no question Apple wants both faster and better chips to power its computers. But one section of the article really destroys the idea that Apple might go with Intel Pentium processors:
Mark Stahlman, an analyst at Caris & Co., says the surfeit of console chips that will need to be produced almost certainly will keep the East Fishkill plant fully occupied, even if Apple weren't a customer. Next year, IBM chips will be inside both Sony Corp.'s new PlayStation console and Microsoft Corp.'s new Xbox. IBM already makes chips for the third major console, Nintendo Co.'s GameCube.
Still, Mr. Stahlman notes the flip side of console fever: Apple long has benefited from being IBM's marquee chip customer, and as such has gotten close attention from Big Blue. Now, he says, with extra attention being lavished on game consoles, Apple is "about to be second or third in line," because IBM chip production for the game boxes exceeds what is required for the Macintosh line.
OK, so lets play this scenario out. Apple is currently one of IBM's premiere customers. It is using a processor that has the same architecture as that being used in all three gaming consoles; in fact, Apple G5s were used for all the Microsoft XBox 360 demos being played at the E3 conference last week. And as IBM produces more processors with that architecture, IBM's chip volumes will rise, and the prices for the chips will fall. Apple ends up in fat city, with higher margins for its products, or the ability to cut prices, or both.
Compare this with the Intel scenario. Apple jumps ship from IBM where it is the second or third most influential customer to a vendor where it would be about 10th in line and have no influence. When Intel introduces a new processor, would Intel ship first to Dell or to Apple? It just doesn't make sense.
The bottom line: Apple isn't going with any other processors for Macs. But what everyone should be looking for is what new products are coming where the processor doesn't matter. And that's an area where the competition between IBM and Intel makes some sense.
posted by Carl Howe at
10:11 AM
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