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Did Apple Just Do Dell a Favor?

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Consider yourself served, IBM (NYSE: IBM  ) . Apple (Nasdaq: AAPL  ) has filed for divorce from Big Blue's PowerPC chip technology. Snow Leopard, the next-generation Mac OS due in September, won't run on PowerPC Macs.

The separation began in 2005, when the iEmpire announced its intent to embrace Intel's (Nasdaq: INTC  ) x86 chipset. Today, all new Macs do. And with Snow Leopard, they'll be built to handle 64-bit chips, so named because they're capable of digesting data 64 "bits" at a time. Most PCs are built to digest 32 bits at a time.

Moves like these are where Apple and Microsoft (Nasdaq: MSFT  ) typically diverge. Windows' legacy is so important that users cried foul when Mr. Softy tried to pull the plug on Windows XP. Apple officially moved to Mac OS X in 2001, and it has yet to check the rearview mirror -- save for a barely noticeable nod to emulation software.

Practically, this means PowerPC Mac owners will either upgrade to a new system, ignore Snow Leopard, or switch to cheaper, more modern PCs from the likes of Dell (Nasdaq: DELL  ) and Hewlett-Packard (NYSE: HPQ  ) .

I'm not expecting many switchers. Netbooks have yet to prove themselves as laptop replacements, and Macs are getting cheaper. Not as cheap as PCs, sure, but cheap enough to be competitive, especially for what is likely to be some very high-powered hardware.

Despite the possibility of a noticeable user exodus in the short term, Apple's making the right move here. Investors need Apple to keep its promise to innovate. Snow Leopard delivers on that promise -- even if it does so at the expense of the PowerPC.

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Fool contributor Tim Beyers had stock and options positions in Apple and a stock position in IBM at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool is also on Twitter as @TheMotleyFool. The Fool's disclosure policy is eating its daily apple. How about you?

Read/Post Comments (13) | Recommend This Article (11)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On June 10, 2009, at 4:02 PM, marv08 wrote:

    "Exodus in short term"? Anybody staying with his/her PowerPC Mac will not give Apple 29 USD. Big deal. Every PowerPC still in existence is at least 3-4 years old. And Power PCs did not run Windows (well, there was a Virtual PC emulation solution from MS, but it was pretty useless for anything more demanding than, say, Notepad). Now, how likely is it for a PowerPC user with more (much more in most cases) than 4 years of investments in software that will not run on any Windows computer to "switch"... Even if all you have is a office suite or Photoshop, getting an Intel Mac will always be cheaper than switching. Also, Mac users are highly unlikely to buy Dell, they might look for something with style and quality.

  • Report this Comment On June 10, 2009, at 4:18 PM, RetiredMidn wrote:

    I agree with Marv08: the "divorce" from PowerPC was executed quickly after announcing the switch from Intel.

    We PowerPC owners (I have a 5-6 year old PowerMac G5) have been well-served by OS releases up until now, and those machines will continue to hum along happily running Leopard for a while yet to come. Nothing has changed that is going to precipitate an abrupt move to new hardware, least of all Dell's.

  • Report this Comment On June 10, 2009, at 4:19 PM, pzarras wrote:

    I'm not sure what current PC's you look at - but I haven't seen a PC that ships with more than 3GB of RAM that doesn't ship with a 64-bit edition of Windows. So Microsoft is clearly agressively moving in the 64-bit OS direction.

    Also - check your history, while you are accurate that current versions of Windows did come from the legacy of Windows NT, Windows 95 had nothing to do with the Windows NT kernel. Windows 95 was built on the legacy DOS platform that died after Windows 98 and Windows Me.

  • Report this Comment On June 10, 2009, at 4:21 PM, blf2 wrote:

    From the "tone" of articles posted on the Motley Fool recently I am beginning to suspect that the publication is Windows biased.

    Holding a little too much useless Dell stock are we? If you really must own stock in a Windows PC company so much, I suggest you dump your Dell and buy Hewlett-Packard while you still have something to dump.

    And, by the way, owning Dell is the same as owning Microsoft as they pretty much dictate to Dell when to jump ...and how high.

  • Report this Comment On June 10, 2009, at 4:38 PM, kckarp wrote:

    Right, anyone think Brand loyalty will play a factor?

    Sure, I'm an Apple fanboy; but, I'm going to try to stay on topic. Snow leopard (OSX 10.6) is a performance enhancement (be nice). New features were derived from the rewrite of code etc. Leopard (OSX 10.5) introduced the last set of new features and it is compatible with the powerPC chip. Now, Leopard is no slouch as an OS goes, but the clock is ticking so to say. I concede that some folks will switch to a non-Apple brand; but, I suggest that a similar number of people will see this as a signal to upgrade. Bottom line, I think a Steve Jobs rumor would have a bigger impact on stock price than these factors. As for myself, my Powerbook G4 was replaced a year ago (by a Macbook Pro), it is now being reutilized as an iTunes server for my network.

  • Report this Comment On June 10, 2009, at 6:54 PM, kakpa wrote:

    I have using Mac Pro for the last 5 year. I don't think as far as I know most Mac users wouldn't change or switch over to Dell.

  • Report this Comment On June 10, 2009, at 8:04 PM, greenwave3 wrote:

    Macs have been and always will be technologically superior to PCs. If Apple ever decides to build business-ready models, Microsoft will cease to be a household name.

  • Report this Comment On June 10, 2009, at 8:08 PM, greenwave3 wrote:

    Dell will also cease to be a household name if Apple built affordable business-ready models.

  • Report this Comment On June 10, 2009, at 8:26 PM, TowerTone wrote:

    Who's to say that a future update of Leopard will not be tweaked for better PPC performance? I have bought two 1.25 GHz eMacs and a G5 iMac for my kids in the past 18 months, and they all fly on Leopard. iChat video, DVDs, internet, all do fine. No HD or transcoding video, but they are still well served by Leopard.

  • Report this Comment On June 10, 2009, at 9:34 PM, pzarras wrote:

    Apple deserves an amazing amount of credit for their ability to have the world that they are the only ones that innovate - and when they introduce some new technology - the world thinks they're the first to do it.

    I'd bet that Apple could convince the world that they invented fire if they wanted to.

    I'm not saying this as a slam - I'm sincere that it's remarkable how effective they are at marketing.

    Even in this article - they would have you believe that Apple is the first to introduce a 64-bit consumer OS - when in fact, Linux has done so for I don't know how long and even Microsoft introduced a 64-bit edition of Windows XP probably 4-5 years ago and Vista had 64-bit from day one...

    But - Apple will get the recognition for it. Incredible.

  • Report this Comment On June 10, 2009, at 10:10 PM, TMFBent wrote:

    People believe what they want to believe, facts be damned. That, of course, makes for some great opportunities in the stock market.

  • Report this Comment On June 10, 2009, at 11:47 PM, terrym4h wrote:

    This article is full of technical inaccuracies, so much so that I made an account just to post a response.

    Every PC sold today (Dell, HP, etc) is 64 bit. Intel hasn't made a non-64 bit processor in ages.

    Microsoft has had 64 bit versions of the OS for just as long (longer?) than Apple. They have native 64 bit versions of all of their flagship applications. The only reason vendors continue to install the 32 bit version by default is for application/driver compatibility.. and even that's a pretty weak argument, because the 64 bit versions of Windows run 32 bit applications fine (this is called "WOW" mode, or Windows On Windows). You'll have to ask Dell and HP about that.

    Apple is playing catch up in the 64 bit game; they're not leading the way. Microsoft and Intel have been pushing it hard for years, dragging (reluctant) application developers behind them. They're leading the charge, just like they did for the 16 bit to 32 bit transition.

  • Report this Comment On June 11, 2009, at 6:51 AM, TMFMileHigh wrote:

    Good morning all,

    Two things. First, I made an error in referring to the Windows NT kernel -- I apologize and a correction will be made.

    Second, I'm surprised to see commenters claim that I'm either (a) bashing Apple or (b) bashing Microsoft. This reflects poorly on the piece.

    To be clear, my aim was to point out how Apple is taking a calculated risk by dumping PPC, one similar to earlier risks that have paid off (i.e., the original move to PPC), and likely necessary if the company is to keep growing. I apologize for my ham-handedness in making this point.

    Thanks to each of you for taking the time to write,

    Tim (TMFMileHigh and @milehighfool on Twitter)

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