Speculation on Real Reasons Behind Apple Switch

/ASCII writes "There is an article over at Ars Technica with some insider information about the reasons behind Apples x86 switch, given that the new IBM processors seem to be a perfect fit for Apple. The article claims that Apple hopes to power its entire line, from Servers to desktops to iPods and other gadgets with Intel CPUs, and that by doing so, they will gain the same kinds of discounts that Dell get."

Comments

interesting take on ipod centric-business planning

[J Barnes]

This is a really interesting take on the switch that I hadn't considered before. This move to intel makes all the sense in the world if Apple is trying to cram an intel processor inside the iPod, and for pure volume discounts alone, this could really help apple's overall profit margin.

I'd worry about putting all my eggs in one basket, but I suppose as far as baskets go, intel is a relatively safe bet overall.

It's also about marketing

[alexhmit01]

Right now, Apple has to market Apple machines vs. Windows machines, and they are hard to compare. When the PPC is better, people don't believe it. They are either behind in performance or MHz/GHz, or something.

This lets a comparison with Dell/HP be VERY clear.

If the Apple hardware is $100-$200 more than a Dell, it is a straightforward question, is it worth this premium to get OS X. It makes for a straightforward comparison. In addition, if Apple's manfuacturing gets better (and they grow their share from the #8 player in the PC space to #3/#4, which is probably around a 10% market-share), then they can price equally to PC players and STILL make good margins, because they don't have to pay MS their fee.

Forget JUST the processor difference, they can really enter a straight competition with a minor price premium for a superior system... Plus, if Microsoft stumbles and looks vulnerable, they can compete in the OS market.

Also, think about Government/Corporate contracts. Someone can write an RFP: runs Linux + random software that is x86 only... or runs Office XP... Since the Apple can, they can now compete for that contract.

Lots of good things for Apple, and some minor fears for those of us suffering the transition. (I have in-house Cocoa apps that will now need to be QA'd on two platforms, even if development is "click a button.")

Alex

Re:interesting take on ipod centric-business plann

[Ed Avis]

And why does Apple need to switch from plain-Jane ARM processors to Intel's greased-lightning XScale? What do they need that extra power for? Why, to bring back the Newton, of course!

what about AMD?

[utopicillusion]

If such a move was made, does this make AMD's anti-trust case against Intel more convincing?

Maybe now (because of the lawsuit), intel will not provide such deals to Apple. Is then, Apple in deep shit?

Yes!

High handed or not

[stefanb]

Irrespective of whether The Steve dealt properly with IBM, the reality is and has been for many years that developing their own CPU (or having it developed for them) was just too expensive for Apple.

The original idea of the Apple-IBM-Motorola coalition was that they would be able to compete with Intel by combining forces: CPUs for servers, workstations, and embedded systems; and by creating a third-party systems market to drive demand for these CPUs (PReP). This never really took off, so IBM and Motorola were stuck with having to compete with Intel for price/performance for a single customer that would only buy a fraction of what Intel and AMD would churn out. I have no idea how much it costs to keep up a competitive CPU architecture, but it must be in the hundreds of millions, if not billions per year.

Cell might be cheap, but it doesn't allow Apple to compete with PCs on a price/performance or performance/watt level. And paying IBM to continue to develop the 970 architecture was just too expensive: people might be willing to pay a bit more for Apple systems, but only so much.

Just look at all other contenders in the high performance CPU market: there's nobody left except for Sun and Fujitsu/Siemens, and they announced last year that they will cooperate on SPARC. From a pure market standpoint, Apple had little choice.

Re:interesting take on ipod centric-business plann

[Phat_Tony]

Everyone says "video iPod," but I think they have the wrong thing in mind. Jobs has said before, and I agree with him, that mobile video playback just isn't a killer app. People want to listen to music in their car, working out, walking around, working- everywhere they don't want to watch TV and movies. People want to watch their movies on their giant home theater setups. Maybe a few people who take public transportation want to watch downloaded video on their iPods, but the potential market for portable video just isn't worth designing a product line to go after. Sure, if you can plop it into your existing product as a software addition, like the PSP (and probably future iPods), you might as well, it may be handy. But it's not a killer app.

What might be a killer app to design a video iPod around is the DV (or HD) camcorder. Clip your iSight onto your iPod. Now you have a camcorder that's smaller than any other on the market and records approximately forever, strait to hard disk, no messing with tapes. Maybe in H264. I think that's what a "video ipod" is going to be.

Have and iPod Video and want an HD camcorder? It'll cost a heck of a lot less than buying a DV camcorder, all you need is the iSight, which, by the way, you can still use as a webcam. Want to upgrade to an HD camcorder? Instead of giving Sony another $1000 to replace your DV camcorder with HD, pay Apple a quarter as much for their new HD iSight and plug it into your existing iPod Video.