Going for Broke- Apple's Decision to Use Intel Processors Is Nothing Less Than an Attempt to Dethrone Microsoft. Really.

[Timothy O'Grady]

June 9, 2005

Going for Broke

Apple's Decision to Use Intel Processors Is Nothing Less Than an
Attempt to Dethrone Microsoft. Really.

By Robert X. Cringely

http://www.pbs.org/cringely/pulpit/pulpit20050609.html

The crowd this week in San Francisco at Apple's World Wide Developers
Conference seemed mildly excited by the prospect of its favorite
computer company turning to Intel processors. The CEO of Adobe asked
why it had taken Apple so long to make the switch? Analysts on Wall
Street were generally positive, with a couple exceptions. WHAT THE HECK
IS GOING ON HERE!? Are these people drunk on Flav-r-Ade? Yes. It is the
legendary Steve Jobs Reality Distortion Field at work. And this time,
what's behind the announcement is so baffling and staggering that it
isn't surprising that nobody has yet figured it out until now.

Apple and Intel are merging.

Let's take a revisionist look at the Apple news, asking a few key
questions. The company has on its web site a video of the speech,
itself, which is well worth watching. It's among this week's links.

Question 1: What happened to the PowerPC's supposed performance
advantage over Intel?

This is the Altivec Factor -- PowerPC's dedicated vector processor in
the G4 and G5 chips that make them so fast at running applications like
Adobe Photoshop and doing that vaunted H.264 video compression. Apple
loved to pull Phil Schiller onstage to do side-by-side speed tests
showing how much faster in real life the G4s and G5s were than their
Pentium equivalents. Was that so much BS? Did Apple not really mean it?
And why was the question totally ignored in this week's presentation?

Question 2: What happened to Apple's 64-bit operating system?

OS X 10.4 -- Tiger -- is a 64-bit OS, remember, yet Intel's 64-bit
chips -- Xeon and Itanium -- are high buck items aimed at servers, not
iMacs. So is Intel going to do a cheaper Itanium for Apple or is Apple
going to pretend that 64-bit never existed? Yes to both is my guess,
which explains why the word "Pentium" was hardly used in the Jobs
presentation. Certainly, he never said WHICH Intel chip they'd be
using, just mentioning an unnamed 3.6-Ghz development system -- a
system which apparently doesn't benchmark very well, either (it's in
the links).

So is 64-bit really nothing to Apple? And why did they make such a big
deal about it in their earlier marketing?

Question 3: Where the heck is AMD?

If Apple is willing to embrace the Intel architecture because of its
performance and low power consumption, then why not go with AMD, which
equals Intel's power specs, EXCEEDS Intel's performance specs AND does
so at a lower price point across the board? Apple and AMD makes far
more sense than Apple and Intel any day.

Question 4: Why announce this chip swap a year before it will even
begin for customers?

This is the biggest question of all, suggesting Steve Jobs has
completely forgotten about Adam Osborne. For those who don't remember
him, Osborne was the charismatic founder of Osborne Computer, makers of
the world's first luggable computer, the Osborne 1. The company failed
in spectacular fashion when Adam pre-announced his next model, the
Osborne Executive, several months before it would actually ship. People
who would have bought Osborne 1s decided to wait for the Executive,
which cost only $200 more and was twice the computer. Osborne sales
crashed and the company folded. So why would Steve Jobs -- who knew
Adam Osborne and even shared a hot tub with him (Steve's longtime
girlfriend back in the day worked as an engineer for Osborne) --
pre-announce this chip change that undercuts not only his present
product line but most of the machines he'll be introducing in the next
12 to 18 months?

Is the guy really going to stand up at some future MacWorld and tout a
new Mac as being the world's most advanced obsolete computer?

This announcement has to cost Apple billions in lost sales as customers
inevitably decide to wait for Intel boxes.

Apple's stated reason for pre-announcing the shift by a year is to
allow third-party developers that amount of time to port their apps to
Intel. But this makes no sense. For one thing, Apple went out of its
way to show how easy the port could be with its Mathematica
demonstration, so why give it a year? And companies typically make such
announcements to their partners in private under NDA and get away with
it. There was no need to make this a public announcement despite
News.com's scoop, which only happened because of the approaching Jobs
speech. Apple could have kept it quiet if they had chosen to, with the
result that not so many sales would have been lost.

This means that there must have been some overriding reason why Apple
HAD to make this public announcement, why it was worth the loss of
billions in sales.

Question 5: Is this all really about Digital Rights Management?

People "in the know" love this idea, that Hollywood moguls are forcing
Apple to switch to Intel because Intel processors have built-in DRM
features that will keep us from pirating music and movies. Yes, Intel
processors have such features, based primarily on the idea of a CPU ID
that we all hated when it was announced years ago so Intel just stopped
talking about it. The CPU ID is still in there, of course, and could be
used to tie certain content to the specific chip in your computer.

But there are two problems with this argument. First, Apple is already
in the music and video distribution businesses without this feature,
which wouldn't be available across the whole product line for another
two years and wouldn't be available across 90 percent of the installed
base for probably another six years. Second, though nobody has ever
mentioned it, I'm fairly sure that the PowerPC, too, has an individual
CPU ID. Every high end microprocessor does, just as every network
device has its unique MAC address.

So while DRM is nice, it probably isn't a driving force in this
decision.

Then what is the driving force?

Microsoft.

Here is my analysis based on not much more than pondering the five
questions, above, and speaking with a few old friends in the business.
I won't say there is no insider information involved, but darned
little.

The obvious questions about performance and 64-bit computing come down
to marketing. At first, I thought that Steve Jobs was somehow taking up
the challenge of making users believe war was peace and hate was love
simply to show that he could do it. Steve is such a powerful
communicator and so able to deceive people that for just a moment, I
thought maybe he was doing this as a pure tour du force -- just because
he could.

Nah. Not even Steve Jobs would try that.

The vaunted Intel roadmap is nice, but no nicer than the AMD roadmap,
and nothing that IBM couldn't have matched. If Apple was willing to
consider a processor switch, moving to the Cell Processor would have
made much more sense than going to Intel or AMD, so I simply have to
conclude that technology has nothing at all to do with this decision.
This is simply about business -- BIG business.

Another clue comes from HP, where a rumor is going around that HP
selling iPods could turn into HP becoming an Apple hardware partner for
personal computers, too.

Microsoft comes into this because Intel hates Microsoft. It hasn't
always been that way, but in recent years Microsoft has abused its
relationship with Intel and used AMD as a cudgel against Intel. Even
worse, from Intel's standpoint Microsoft doesn't work hard enough to
challenge its hardware. For Intel to keep growing, people have to
replace their PCs more often and Microsoft's bloatware strategy just
isn't making that happen, especially if they keep delaying Longhorn.

Enter Apple. This isn't a story about Intel gaining another three
percent market share at the expense of IBM, it is about Intel taking
back control of the desktop from Microsoft.

Intel is fed up with Microsoft. Microsoft has no innovation that drives
what Intel must have, which is a use for more processing power. And
when they did have one with the Xbox, they went elsewhere.

So Intel buys Apple and works with their OEMs to get products out in
the market. The OEMs would love to be able to offer a higher margin
product with better reliability than Microsoft. Intel/Apple enters the
market just as Microsoft announces yet another delay in their next
generation OS. By the way, the new Apple OS for the Intel Architecture
has a compatibility mode with Windows (I'm just guessing on this one).

This scenario works well for everyone except Microsoft. If Intel was
able to own the Mac OS and make it available to all the OEMs, it could
break the back of Microsoft. And if they tuned the OS to take advantage
of unique features that only Intel had, they would put AMD back in the
box, too. Apple could return Intel to its traditional role of being
where all the value was in the PC world. And Apple/Intel could easily
extend this to the consumer electronics world. How much would it cost
Intel to buy Apple? Not much. And if they paid in stock it would cost
nothing at all since investors would drive shares through the roof on a
huge swell of user enthusiasm.

That's the story as I see it unfolding. Steve Jobs finally beats Bill
Gates. And with the sale of Apple to Intel, Steve accepts the position
of CEO of the Pixar/Disney/Sony Media Company.

Remember, you read it here first.