2005-05-23 15:19:32 UTC
Wall Street Journal http://online.wsj.com/public/us
Apple Explores Use Of Chips From Intel For Macintosh Line
By DON CLARK and NICK WINGFIELD
Staff Reporters of THE WALL STREET JOURNAL
May 23, 2005; Page C1
Apple Computer Inc. has always blazed its own trail, a tack that has helped
turn the company into a stock-market darling lately. But a pivotal step
toward the mainstream could be in the offing.
The computer maker has been in talks that could lead to a decision soon to
use Intel Corp. chips in its Macintosh computer line, industry executives
say, a prospect that may shake up the world of computers and software.
The idea that Apple Computer might use Intel-based products, which provide
processing power for personal computers that use Microsoft Corp. software,
has long been the subject of industry speculation and off-and-on
negotiations between Apple and Intel. Two industry executives with knowledge
of recent discussions between the companies said Apple will agree to use
Intel chips.
Neither company would confirm any change in their relationship. Nor is it
clear, if Apple does proceed with plans to work with Intel, whether it will
make a large-scale shift away from chips made by International Business
Machines Corp., its longtime supplier. Talks between Apple and Intel could
founder, as they have before, or Apple could be engaging in negotiations
with Intel to gain leverage over IBM.
Still, Apple's consideration of Intel chips reflects what others in Silicon
Valley see as a crescendo of commercial considerations for both companies.
For Apple, which has struggled to expand beyond a tiny sliver of the PC
market, adopting Intel chips would help ensure that future Macintosh systems
meet the price and performance of products from tough rivals such as Dell
Inc.
Macintosh users, for example, could benefit by getting access to Intel's
power-saving chips for laptop computers and other new chips that offer the
equivalent of two electronic brains on a single piece of silicon. Apple's
pricing, which has often been higher than rivals, also could be more
competitive -- particularly if Intel provides the kind of marketing
subsidies it has given to other computer makers.
Using Intel chips also makes it at least theoretically possible that users
could install Windows on Macintosh systems, though it is not clear that
Apple will support software other than its Mac OS X operating system.
For Intel, already the dominant supplier of the calculating engines inside
computers, winning Apple would be a prestigious endorsement from one of
technology's most influential trend-setters. Under Steve Jobs, Apple's chief
executive officer and co-founder, Apple has consistently delivered
innovative hardware designs and blazed a trail in digital music.
Apple sells only about three million computers a year -- a small portion of
the 200 million or so machines sold globally -- so a new relationship with
Intel wouldn't increase that company's sales much. But Intel, which has long
courted Apple, could benefit by an association with Apple and its hit iPod
device, which may be luring more Windows PC users to consider Apple computer
products. It could also continue the perception of momentum that has made
Apple shares nearly quadruple since the iPod was introduced in October
2001...
...An Apple spokeswoman said she would characterize the possibility of
adopting Intel chips "in the category of rumor and speculation."
Apple could choose to add some Intel-based models to its product line or
make a complete shift to Intel's chip technology. The latter would be a
serious blow to IBM's microprocessor business, though the big computer maker
has had success in convincing Microsoft, Sony Corp. and Nintendo Co. to use
PowerPC technology in their next-generation video machines. An IBM spokesman
declined to comment...
Apple's bread-and-butter Mac business has shown signs of vigor lately. While
growth in the broader PC industry remains sluggish, Apple last quarter sold
43% more Macs than it did in the year-earlier quarter, quadruple the pace of
the industry as a whole.
Yet, in a sign of how small a player Apple remains in the PC market, the
strong sales have translated into only minuscule market-share gains. Apple
rose to 2.3% of new world-wide PC sales in the first three months of the
year from 2% the prior quarter. Windows PCs account for the vast majority of
the rest of the market.
Apple Explores Use Of Chips From Intel For Macintosh Line
By DON CLARK and NICK WINGFIELD
Staff Reporters of THE WALL STREET JOURNAL
May 23, 2005; Page C1
Apple Computer Inc. has always blazed its own trail, a tack that has helped
turn the company into a stock-market darling lately. But a pivotal step
toward the mainstream could be in the offing.
The computer maker has been in talks that could lead to a decision soon to
use Intel Corp. chips in its Macintosh computer line, industry executives
say, a prospect that may shake up the world of computers and software.
The idea that Apple Computer might use Intel-based products, which provide
processing power for personal computers that use Microsoft Corp. software,
has long been the subject of industry speculation and off-and-on
negotiations between Apple and Intel. Two industry executives with knowledge
of recent discussions between the companies said Apple will agree to use
Intel chips.
Neither company would confirm any change in their relationship. Nor is it
clear, if Apple does proceed with plans to work with Intel, whether it will
make a large-scale shift away from chips made by International Business
Machines Corp., its longtime supplier. Talks between Apple and Intel could
founder, as they have before, or Apple could be engaging in negotiations
with Intel to gain leverage over IBM.
Still, Apple's consideration of Intel chips reflects what others in Silicon
Valley see as a crescendo of commercial considerations for both companies.
For Apple, which has struggled to expand beyond a tiny sliver of the PC
market, adopting Intel chips would help ensure that future Macintosh systems
meet the price and performance of products from tough rivals such as Dell
Inc.
Macintosh users, for example, could benefit by getting access to Intel's
power-saving chips for laptop computers and other new chips that offer the
equivalent of two electronic brains on a single piece of silicon. Apple's
pricing, which has often been higher than rivals, also could be more
competitive -- particularly if Intel provides the kind of marketing
subsidies it has given to other computer makers.
Using Intel chips also makes it at least theoretically possible that users
could install Windows on Macintosh systems, though it is not clear that
Apple will support software other than its Mac OS X operating system.
For Intel, already the dominant supplier of the calculating engines inside
computers, winning Apple would be a prestigious endorsement from one of
technology's most influential trend-setters. Under Steve Jobs, Apple's chief
executive officer and co-founder, Apple has consistently delivered
innovative hardware designs and blazed a trail in digital music.
Apple sells only about three million computers a year -- a small portion of
the 200 million or so machines sold globally -- so a new relationship with
Intel wouldn't increase that company's sales much. But Intel, which has long
courted Apple, could benefit by an association with Apple and its hit iPod
device, which may be luring more Windows PC users to consider Apple computer
products. It could also continue the perception of momentum that has made
Apple shares nearly quadruple since the iPod was introduced in October
2001...
...An Apple spokeswoman said she would characterize the possibility of
adopting Intel chips "in the category of rumor and speculation."
Apple could choose to add some Intel-based models to its product line or
make a complete shift to Intel's chip technology. The latter would be a
serious blow to IBM's microprocessor business, though the big computer maker
has had success in convincing Microsoft, Sony Corp. and Nintendo Co. to use
PowerPC technology in their next-generation video machines. An IBM spokesman
declined to comment...
Apple's bread-and-butter Mac business has shown signs of vigor lately. While
growth in the broader PC industry remains sluggish, Apple last quarter sold
43% more Macs than it did in the year-earlier quarter, quadruple the pace of
the industry as a whole.
Yet, in a sign of how small a player Apple remains in the PC market, the
strong sales have translated into only minuscule market-share gains. Apple
rose to 2.3% of new world-wide PC sales in the first three months of the
year from 2% the prior quarter. Windows PCs account for the vast majority of
the rest of the market.