Wall Street weighs in on Apple-Intel rumors
With just a matter of hours remaining before Apple chief executive Steve Jobs takes center stage at Apple's annual developers conference, several Wall Street analysts have issued research notes commenting on rumors that the company may use the conference to announce a phased-transition to Intel-based Macs.
"There are clearly risks to transitioning to a different processor after more than a decade on the IBM platform," said Gene Munster, a senior analyst at the firm. "The most visible risk is that there could be some push back in the developer community, as the move would require programmers to rewrite some applications."
On the other hand, Munster listed three key reasons why Apple would benefit from a switch to Intel. First and foremost, the analyst believes Intel will afford Apple a more consistent supply of microprocessors. He notes: "Apple has encountered many instances in which the supply of IBM PowerPC processors has been inconsistent and resulted in inventory constraint issues for Macs."
Munster also said the move would help Apple become more competitive with its pricing in the PC market and possibly lead to a larger developer community. "Over time, we believe an Intel-based Mac would lead to a larger developer community, potentially providing for greater breadth of applications for the Mac."
However, not all analysts view Apple's potential move to Intel equally. Shaw Wu, an analyst for American Technology Research, maintains his belief that there is no material cost advantage in using Intel x86 chips over IBM's PowerPC. "We believe IBM has sacrificed profitability to drive price points attractive to customers that use PowerPC," the analyst reiterated in a research note released to clients today.
Additionally, Wu says Apple could risk alienating some of its loyal customer base and may cause a freeze in Mac purchasing while users evaluate the potential platform change. He noted: back in 1984 to 1986, Apple lost a lot of customers when it moved from the Apple II to the Mac. The same was true in 1994 when it moved from the Motorola 68000 family of processors to PowerPC.
For these reason, Wu believes a more likely scenario is for Apple to support both the PowerPC and x86 architectures. Either separately or in conjunction with an Intel-related announcement, the analyst said Apple could potentially announce development and support of new dual-core G5 and G4 processors from IBM and Freescale, respectively.
Apple may also soon up the standard memory in its new Mac mini desktop from 256 MB to 512MB, the analyst said. "We have heard many users complain about the low amount of included memory in the Mac mini and the difficulty in installing additional DRAM."
Neither PiperJaffray nor AmTech Research is jumping to change their fundamental view on Apple just yet. Both firms maintain their respective ratings on Apple of "outperform" and "hold." PiperJaffray has set Apple's price target at $51 a share while AmTech, concerned with high investor expectations, targets the stock at $40 a share.
18 Comments
The outcome will certainly depend on the terms of the deal: if the move is intended to be complete and involves dropping the PowerPC altogther, Apple will not ne able to sell one more computer until that move has happened. If it indeed takes years (2006, 2007), then this is the end of the company: they will not be able to handle a complete drain on hardware sales for so long. If they decide to keep both CPUs along, then they will have just made it more expensive for developers, who will have to invest more heavily in test hardware.
Anyway you put it, this is going to be ugly. The only way Apple can make this work would be to significantly increase the size of the pie for Apple developers. But that would mean opening up Mac OS X to third-party hardware manufacturers. Again that would not go well with Apple's fundamentals and their hardware business, particularly on the short term.
I'm really wondering what kind of trick Steve Jobs has up his sleeves that would not trigger a lawsuit by AAPL shareholders...
A few more hours...
MM
I'm really wondering what kind of trick Steve Jobs has up his sleeves that would not trigger a lawsuit by AAPL shareholders...
A few more hours...
MM
perhaps we'll see bill gates' face ont he big screen again today, to announce the creation of msapple, microsofts' new creative computing division?
(damn, i feel dirty for even typing that...)
Apple may have an emulator that will allow all of thier mac software to run on the a new x86 version of OSX with no performance loss. This would allow for a smooth transition.
http://www.wired.com/news/mac/0,2125...tml?tw=rss.TOP
I see nothing in any of the articles that represent tangible proof that Apple is announcing a transition of the Macintosh product line to Intel based chips. The reporters seem to extrapolate from the small amount of evidence provided an implausible but dramatic conclusion. Truth is, generally, more mundane than conjecture.
The plausible announcements, if any are to occur at all, is a manufacturing licensing agreement, whereby Intel will be manufacturing PPC based chips for Apple's Macintosh system, or perhaps Intel will be manufacturing a chipset for a new unannounced Apple product, possibly something taking advantage of Intel's progress with WiFi technology.
Now it's my turn for wild conjecture. Suppose this announcement has nothing to do with X86 architecture or Macintosh computers ... Suppose it is the announcement of joint effort by Intel and Apple to launch a third option in the personal computer world, one that takes advantage of the performance and price competitivenes of Intel's chip technology and the security and ease of use of Apple's OSX.
The intent would be to compete directly with, and ultimately kill off Windows based PCs and PowerPC based Apple Macintosh systems. Apple has it's hands in nearly every aspect of the creative and consumer software world - not all of it, but they've come this far, they could continue - internal porting could have been under way for some time.
Think about the possibilities and freedom Intel and Apple could have. Cutting away the previous generations of computers, and starting entirely fresh, taking with them only what they need - these new systems could open up new markets, penetrate old ones... these new machines would be cheap, secure, reliable, well-integrated and even (unfortunately) fully DRM'd.
This could be the announcement of the brave new world of the next generation of personal computers....
but most likely not....
Check out this article:
http://www.theinquirer.net/?article=23714