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.
According to PiperJaffray, an investment and research firm which closely follows the Mac maker, there are several positives and negatives to a switch to Intel, but ultimately the long-term positives will outweigh the negatives.
"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.
According to PiperJaffray, an investment and research firm which closely follows the Mac maker, there are several positives and negatives to a switch to Intel, but ultimately the long-term positives will outweigh the negatives.
"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.
Comments
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
Originally posted by marmotton
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...)
http://www.wired.com/news/mac/0,2125...tml?tw=rss.TOP
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....
http://www.theinquirer.net/?article=23714
An Intel based Macintosh?
Rumors of Apple switching to an Intel based processor pre-date the existence of this site. The earliest reference in our archives comes from March 15, 2000 (this site was founded in Feb 2000). For some perspective... a rumor roundup for WWDC 2000 (5 years ago) included rumors of "Intel-based Macs".
Analysts also "urged Apple to move to microchips from Intel Corp" back in July 2002. Steve Jobs replied that they had to finish the OS 9 -> OS X transition first but "Then we'll have options, and we like to have options. But right now, between Motorola and IBM, the roadmap looks pretty decent."
After the transition to Mac OS X, Apple was reported to have kept an OS X on x86 side-project known as Marklar. The original article described Marklar as a "fall back plan" should the PowerPC fail to deliver.
The PowerPC was undergoing slow development during that time until IBM took over development and Apple announced PowerPC G5 based PowerMacs in the summer on 2003.
In fact, IBM bragged in an internal memo that while Apple considered moving to Intel at that time they went with IBM's PowerPC G5 (970) because Apple felt the transition to Intel would be too difficult:
While Intel is aggressive in achieving its performance and speed goals, Apple believed that using Intel would deeply affect its current customer base. Using an Intel architecture might solve Apple's short-term megahertz dilemma, but customers would have to suffer through a slow transition from PowerPC over the long term. Every existing Mac program would potentially have to be recompiled to work on an Intel platform. These massive software changes were something that Apple wanted to avoid, and IBM had the solution."
Despite this, Apple/Intel rumors continued to surface (Sept 2003).
Most recently, The Wall Street Journal posted rumors citing "two industry executives" that Apple will agree to use Intel chips. Due to the long history of this topic, this rumor was largely dismissed. However, on Friday, CNet posted a report claiming that Apple will be announcing a plan to switch its computers to Intel based microprocessors on Monday at WWDC. The gradual transition would take place starting in mid-2006 and last until mid-2007.
So what's different this time?
The most striking aspect is the origination of rumors from more traditional news sources (CNet and the Wall Street Journal). In the hierarchy of rumor sources, these news sites are traditionally more accurate as they tend to be more selective about their stories than dedicated rumor sites. As a result, the likelihood that these rumors are true is high. By our records, CNet has only made one major rumor misstep in Jan 2003 claiming the release of new Digital Media Device at MWSF 2003.
That being said, it doesn't answer the many other questions that would stem from such a transition. Questions such as emulation layers, current PowerPC Mac sales, developer migration, end user confusion and more. As well, Steve Jobs was recently asked about the possibility of switching to Intel and reportedly "Jobs basically said no."
Stay tuned for the WWDC Keynote on Monday, June 6th at 10am PST. We will provide live coverage of the event and have dramatically expanded our delivery resources and technology to provide the best Keynote coverage experience possible.
Update: New York Times claims the same.
Update 2: Legal Counsel for Transitive Technologies has posted to bio: Transitive Technologies: Represented Transitive Technologies in a co-development and licensing agreement with Apple Computer. Transitive was the focal point of a Page 2 story regarding their "Dynamite" which allowed code written for one CPU to be run efficiently on another CPU. This "translator" was said to dynamically translate and accelerate binaries -- claiming to provide substantial performance over traditional "emulators".
Originally posted by archer75
Check out this article:
http://www.theinquirer.net/?article=23714
That article-let is a statement of an idea, not containing any tangible fact.
I do agree that if such a transition were to occur it's going to begin on the portable side. Apple needs a powerful portable solution, and it seems very likely that they've had little luck on the PowerPC side of the processor industry.
This change would also mean that OS9 could not run outside of hardware emmulator thus TRULY killing OS9.
Originally posted by archer75
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
That article suggests something very upsetting, the loss of control over content on our personal computers is the begininnings of our loss of control over our freedom of expression and communication.
And that is what I was stating earlier, Apple and Intel may be doing.
Originally posted by sorhed
That article suggests something very upsetting, the loss of control over content on our personal computers is the begininnings of our loss of control over our freedom of expression and communication.
And that is what I was stating earlier, Apple and Intel may be doing.
I think you're reading too much into it. How is this any sort of a loss of control? Why does there even need to be control?
Originally posted by archer75
I think you're reading too much into it. How is this any sort of a loss of control? Why does there even need to be control?
Well yes, I am suffering from an extreme case of paranoid conjecture. Since my computer is a digital extesion of my mind, based on its contents and how I use it - it makes me uncomfortable to think that restrictions may be placed on what content my computer can hold.
It transforms the personal computer from a creative space to a consumer space, more so than it already is.
But this is just an inference into an Orwellian outcome to the world of PCs, not grounded in any more than years of hinting at DRM control breaking out everywhere.
Originally posted by pnbarnes
Where can we watch the keynote live?
In California... at the conference....
Originally posted by sorhed
Well yes, I am suffering from an extreme case of paranoid conjecture. Since my computer is a digital extesion of my mind, based on its contents and how I use it - it makes me uncomfortable to think that restrictions may be placed on what content my computer can hold.
What the hell are you talking about? I see no restrictions being placed on it, quite the opposite actually.
Originally posted by archer75
What the hell are you talking about? I see no restrictions being placed on it, quite the opposite actually.
Released just few days ago, the dual-core chips include a hardware copy protection scheme that prevents "unauthorized copying and distribution of copyrighted materials from the motherboard," according to PC World.
Intel's DRM scheme has been kept under wraps -- to prevent giving clues to crackers -- but the company has said it will allow content to be moved around a home network, and onto suitably-equipped portable devices.
And that's why the whole Mac platform has to shift to Intel. Consumers will want to move content from one device to another -- or one computer to another -- and Intel's DRM scheme will keep it all nicely locked down.
And where does my own personal content fit into this? How can I guarantee that what I create will be permissible to play if it doesnt fall under the correct copyright laws, ones that dont necessarily apply to me as a citizen of a different country.
I'm not claiming that the sky is falling yet, but I think caution is due at this point in time.
If I had a nickel for every time some brain dead analyst states that Apple lost customers during the PowerPC transition... Apple sold record numbers of Macs in 1995.
Originally posted by sorhed
And where does my own personal content fit into this? How can I guarantee that what I create will be permissible to play if it doesnt fall under the correct copyright laws, ones that dont necessarily apply to me as a citizen of a different country.
I'm not claiming that the sky is falling yet, but I think caution is due at this point in time.
No DRM.
http://yro.slashdot.org/article.pl?s...id=118&tid=137