Originally posted by Matsu
Keeping in mind that I don't know how any of this really affects things, just what I hear, I think it comes down to two things. The design and manufacturing.
No, it comes down to more than two things:
1) Motorola management takes bad to baditudinous new levels of badness - "Dilbert" was inspired by Motorola (which, appropriately, held #1 on the Dilbert Index for years), and Motorola employees have given Scott Adams years worth of strip ideas. Things have reportedly been improving since the shareholder revolt, but turning a corporation that large with a culture that compromised is not easy or quick. Really, this is the root cause: all other problems stem from the utter, baffling incompetence of Motorola's management, from the executive suite on down.
2) Mot didn't pay their senior CPU engineers well, or give them raises, or even treat them like senior CPU engineers. They left for Intel some two years ago, and who can blame them?
3) Iridium. This white whale distracted the company from its core competency, drained away billions upon billions of dollars, and finally ended up getting sold for something like $250 million under the auspices of a bankruptcy court. Forget the $100M charge Motorola took from the clone cancellation (which was also a consistent money loser). This was a years-long sucking chest wound for the company.
4) Process technology. What was left of Motorola CPU engineering has taken a few gambles on process tech that haven't paid off, and they're still having very little luck transferring tech that works just fine in their labs to full-scale manufacturing.
5) Fabrication. Mot had a bunch of old fabs lying around losing money, either because they were running, but couldn't compete with the likes of TSMC, or because they were literally standing empty and bleeding money, like Mot's one fab in China.
6) Fabrication. Mot had so little money that they had to stop the fans in their fabs to save on electricity bills. The resulting filth made them almost unusable, except for things like flash memory.
The claim that Apple doesn't have the market share to have any say in CPU design is manifestly false: Since 1994 at the very latest, Apple has had a hand in the design of every single CPU they've used, including the 970 - and the 970 itself is proof that Apple can ask for and get a high-end CPU (because they're not going to be the only customer). In fact, IBM had come through for them one time before with the 604/604e/604ev series - a monster of a CPU in its day. Motorola couldn't produce a high-end CPU for reasons specific to Motorola, not to Apple. Apple's market share relative to overall PowerPC market share is actually an advantage: They'd be a bit player for Intel, and so Intel would essentially ignore their needs.
As for Motorola, they've done a lot of necessary things to turn themselves around in the last year. Crolles is an important step in the return to profitability. Once they're profitable again, they can hire talent. Once they have talent, they can respond more quickly and competently to Apple's design needs, and to their own process needs. But this is a matter of years. In the mean time, they'll be limping along. Wild card: Apple has CPU designers, and Mot has made noises about a "high end PPC" to debut sometime next year. But this just means they're trying hard to turn around, not that they're back to their old Six Sigma form.