POST OF THE DAY
Apple
In which I Gloat, Analyze, and Go Out on a Limb

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By ikedim
June 6, 2005

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First things first - I simply can't resist a little gloating. I've been trying to point out the box Apple is in as far as keeping up with Intel/AMD on the processor end for years; for example, see this little rant of mine from 2002. Of course, I gave up trying to argue with the cockeyed optimists who first said Motorola was doing just peachy, and now apparently think IBM is the wave of the future. So, I will take a little pride in having seen this almost inexorable trend years ago, said pride being tempered only by the fact that I couldn't figure out a way to make large amounts of cash off that observation.

But now, down to business. I'm going to speculate a bit about Steve's state of mind, then go way out on a limb about what might be happening here. Now, the state of mind thing isn't that tough. To begin with, there's the fact that Steve was made to look like an idiot when he himself went out on a limb and promised a 3 GHz G5 in a year at the G5 introduction (doubtless based on IBM's representations to him), only to be currently stuck at 2.75 GHz around two years later. Then, there's IBM's extremely lackluster performance at supplying him with enough G5's to meet demand. Ahh, I can already hear the chorus gearing up: "But Intel/AMD are also having lots of unanticipated trouble increasing clock speed! And they've also occasionally had hiccups starting up new processes!" And, indeed, if St. Francis of Assisi was running Apple, he might have some understanding for these lapses. But somehow, I don't think His Steveness does.

In addition to these somewhat minor offenses, there are a couple of huge problems looming ahead like ten miles of bad road, and I think Steve has come to an understanding that they would only get worse over time:

- Apple now gets a big slice of its computer sales from the mobile and low end lines using the G4. IBM is nowhere close to putting out a G5 usable for these lines, meaning Apple is stuck with the middling-to-middling G4. Meanwhile, Intel and AMD are beating each other's brains out coming up with improved CPU's for this market.

- Again in the beating each others brains out department, Intel and AMD are putting the pedal to the metal in coming out with multicore CPU's. Meanwhile, it's extremely doubtful that IBM would be that quick in producing a multicore desktop CPU for Apple since this would start to cannibalize its higher end systems, on which it makes much more money than the desktop CPU business.

So, I've seen this transition to Intel as almost inevitable for a while. But now, the going out on a limb part. What is Steve's game here? He always seems to make a virtue of necessity in these cases, so we can anticipate that he got Intel extremely hot and bothered to make this deal, and extracted maximum concessions from them. But to what end? Was it merely to get really good terms on pricing? That would just put Apple on a par with Dell for crying out loud - rather small beer for His Steveness! And why the particular time frame for the transition? And would Steve really concede defeat and go for a generic X86 CPU? And then it hits me - I think he's going to get a custom job! That is, I think Intel is going to make Apple a custom CPU that, at a minimum does the Altivec instructions in hardware, and also probably has a fast hardware emulator for the powerPC instruction set. It almost has to be! Steve, if you can pull this off, I take back everything I ever said about you! Now I'm totally on pins and needles for Monday ...

Isaac


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