June 6, 2005

Apple's chip switcheroo introduces new supply-chain problems

Author: Melanie Hollands

Apple CEO Steve Jobs told the Apple Worldwide Developer Conference today that his company was going to sever its longtime chip-supplying relationship with IBM and switch all Apple computers to Intel processors in the near future.
Melanie Hollands

This changeover had been rumored for several weeks, and up until today, not a lot of IT business observers believed it actually was going to happen.

My chief concern here in switching to Intel parts is the timing of the conversion. If the new Apple Mini is released around mid-2006 and the next-generation MacIntosh by around mid-2007, then this leaves Apple's product line in "transition" for two years. That's a long time for the risk of becoming obsolete or incompatible being in play in the minds of potential buyers. Plus, the only value-add from Apple then is the software. (Microsoft is not what I see as a nimble competitor, but it can bring a lot of weight to bear on a "problem" or "opportunity.")

I still have a hard time imagining why Apple would go over to Intel – a company it has long regarded as the Dark Side. When Apple did the Microsoft deal, it needed the money. It is now in a much stronger position, so this motivation would not seem to be in play.

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