May 26, 2005

Why Apple is likely using Intel as a bargaining chip

Author: Melanie Hollandsm

Apple Computer has been in talks with semiconductor-maker Intel to use its chips in Apple's Macintosh computers, according to the Wall Street Journal. Currently, Apple uses IBMs PowerPC chips. There has been speculation over the years that Apple might shift to Intel chips. But such forms of speculation in the tech business
Melanie Hollands

are a spectator sport. It is unclear whether Apple is serious about using Intel chips, whether the talks are exploratory, or whether Apple would use both IBM and Intel parts versus a making complete shift to Intel.

My take on the recent Journal article is that Apple may be in a snit over the apparent priority within IBM of the Cell processor above the raw PowerPC. Rather than tune PowerPC for the Macintosh, it was tuned for video games and DVDs -- a different video niche than what Apple would like.

Tactically, therefore, Apple's best retaliation is to talk to Intel and let it slip into the news. It serves notice on IBM not to take Apple's business for granted. This is not unlike Dell's tactics: Dell uses Intel chips; but then it talks to AMD and then, shortly afterward, it gets a bigger price break from Intel when it "decides" to stay 100 percent with Intel chips.

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