Switch To A Mac

Helping people Switch to an Apple Macintosh one person at time

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Monday, June 06, 2005

Switch To Intel

The rumor hit its peak this weekend following an article from CNet's News.com website and today, the CEO of Apple Steve Jobs, confirmed the rumor. Jobs made the announcement during his keynotte speech at the company's annual WWDC conference for software developers in San Francisco.

Starting next year the first Macs with Intel processors will be shipped. Indications are that you'll see the first Intel based Mac by WWDC 2006 and the transition of the entire Mac line will be complete by the end of 2007.

A few interesting quotes from Steve jobs:

"secret double life" and "cross-platform by design" references to every version of OS X secretly built for both the PowerPC and Intel processor.
"Our goal is to provide our customers with the best personal computers in the world, and looking ahead Intel has the strongest processor roadmap by far”
"We have great products right now, and we've got some great Power PC products still yet to come"

Overall, I think this will immediately hurt Mac sales. I know that I wouldn't want to purchase a new Mac if I knew that the processor will no longer be available next year or in 2007. I expect anyone considering a Mac to feel the same way. I think today's news will seriously slow the Switch To A Mac. I believe that potential switchers will have second thoughts about purchasing a Mac until the move to Intel is complete.

I think it would be wise for Apple to cut the price of Macs to keep the revenue numbers up. The iPod can only do so much for the bottom line.

What are your thoughts?

Please place your vote in the poll on the upper right side of this page.

3 Comments:

At 5:59 PM, Anonymous said...: Following a link to: http://www.answers.com/osborne%20effect on AppleMacUK list, I found the following definition which put flesh on a feeling I had but couldn't quite identify. The important question is: What do potential Mac buyers feel when they hear of Apple's decision to swap to Intel Processors? Logic has absolutely nothing to do with it. :

"Osborne Effect was a well known term in the Silicon Valley back in the 1980s. It was named after the marketing blunder at Osborne Computer Corporation which might have attributed to its bankruptcy in 1983. When a company pre-announce a future product before it is ready to ship, the customers stop buying the old products just to wait for the new one. When sales dry up, the company goes under.

Preannouncing products, and incurring the Osborne Effect, is an example of a self-defeating prophesy."

Whether people decide to take the risk of buying a PowerPC based Mac, knowing that in a year's time it will be superseded by models using Intel processors will be based on a question of trust.

As a result of this decision, I believe Apple have created a big problem for themselves. The whole switcher programme upon which their entire last few years marketing has been based, is irrevocably damaged by this processor swap.

A few telling quotes from Steve jobs at the Development Conference as he announces Apple's decision, declaring that Mac user's favourite OS has lead a "secret double life" because it's been "cross-platform by design", references to every version of OS X secretly built for both the PowerPC and Intel processor, will mean nothing to most people who own Macs now and are considering buying a Mac.

The fact is, people won't read the small print designed to reassure buyers, in my opinion they will simply loose trust in Apple.

It's as important what happens to the share price as it is what happens to sales. A publicly listed company is at the mercy of dual economic forces which can and will feed off each other.

The same effect which has boosted Apple's share value by exceptional proportions over the past 18 months can equally turn the market against them. The next 12 months will be very telling for Apple.
At 5:53 AM, Anonymous said...: I'm not sure the move to intel is necessarily a good one. It seems all the consoles are going for risc based processors. These are processor hungry based hardware. Intel is big - very big and I wonder if thats the reason Apple have gone in that direction. Cheap high clock speed (not necessarily faster computationally) processors. I think some Mac fans will see this as Apple going to the dark side. In reatilty the processor in the box is only part of the picture. Apples disign and software are really going to have to sing. The one who really has to worry is Microsoft. We now have the situation of OS's being on the same playing field. Benchmarks such as Photoshop are going to be very revealing once we get intel complied code for Mac os.

I'm not sure how this will play in the short term but in the midium to long it could shake computer OS's to the core.
At 8:22 PM, Anonymous said...: I have to revise my comments a little. I wrote the last reply before watching Steve Jobs' WWDC Keynote. Never a good idea. Having analysed its content, I've come to some new conclusions. Firstly, for me, the star of the show was Theo Gray of Mathematica who employed a great standup routine to describe the ease with which a PowerPc app can be ported to run on an Intel chip Mac, and gave us this great line:

"It's good when the worst thing about a port is what to do with the rest of the weekend!"

But listening to Steve's presentation, which I thought was even more accomplished than ever, it became clear that Apple have indeed thought it through from a development point of view, as well as a user perspective. There isn't time or space here to go through all the dynamics of the change, but credit must go to:

From Apple:
Xcode 2.1
Rosetta: Dynamic Binary Translator

And from Intel:
Vastly improved power consumption per Watt. Intel's chip has a projected 70 units of performance per Watt [as opposed to PowerPc's roadmap indicated 15 units of performance per Watt.]

But why have I changed my mind about the overall effect on Apple?

Apple have completed one five year plan and, reading between the lines, I believe they have just committed to another five year plan which I suspect will culminate in an all-out attack on the business market.

Why? Because I believe it sticks in the throat of Steve Jobs to have to describe Macs as only the world's best 'personal' computer. I think he is dedicated to moving into the volume business area with a vengeance.

This is the kind of thing you can do with an unprecedented OS rollout [the 5th in as many years] which is not only showing a 50% take-up of OS 10.4 Tiger [the most successful OS release ever], but a unit sales record of G5s which is bucking the general trend in the PC market by several percentage points.

Indeed this is the kind of thing you can ONLY do if you've chalked up mammoth sales of the world's most popular personal music player [grabbing 84% of the market] and coupled it to the world's most successful download site in an increasingly competitive market.

As well as producing great revenue streams, these two areas have helped boost the image of Apple internationally, made them visible again and for very little advertising cost, made Apple cool.

Now the time has come for Apple to produce the definitive business machine to rival the already ancient IBM clone, one which has all the advantages of Apple's build quality, stable OS and unrivalled security.

Watch this space. If the market analysts know their business [and there's no guarantee of that: see Google release Aug 2004!] Apple shares are set to rise again very soon [at least within next 12 months], giving them the finance they need for this push, which I predict will begin in ernest in 2007/8.

By 2010, expect to see Steve Jobs standing, not on a stage at the WWDC in front of 3500 delegates, but on the international stage, with his foot resting triumphantly on a longhorned skeletal head of a bovine creature which once again promised a lot and delivered the same old crap from Microsoft.

Well before that, expect to hear him announce Apple Business: encompassing hardware solutions to not only rival Windows boxes, but beat them on speed and reliability, as well as software solutions to to deliver great productivity and solve security issues, which the industry are going to love.

Yes, I know, I'm making a prediction that Microsoft, having put off the release of their new OS for so many years, will not benefit from the extended development time, but fail to get it right yet again, and I'm doing so without any evidence other than history.

I admit it's a brave prediction. But when it comes to history, Microsoft have been successful in two areas: monopoly and ubiquity.

Monopoly brought huge profits and law suits. Ubiquity brought 140'000 worms and viruses to every PC in the world and created an industry for virus protection, whilst losing Windows users millions of hours of revenue in downtime and many more through fraud.

Furthermore, Microsoft were not often genuine first movers in the industry, they don't have the best products [and rarely have] but they do have a legacy of serious issues which are becoming intolerable.

Microsoft also spawned another situation within the world of computing. It attracted the ire of thousands of software developers who have been denied access to their Windows OS code. It is these very developers who populate the Open Source area of code development who are often credited as the source of the viruses designed to attack Windows systems. Whatever the usual motives, Windows is fatally flawed.

For economic reasons, government ministries and state-run enterprises in countries like Brazil have increasingly decided to abandon Windows in favour of 'open-source' or 'free' software, like Linux. But much of the rest of the world has the money to buy the best, and given the choice, many will choose Apple.

However you look at it, Microsoft is vulnerable... by design. Perhaps for the first time in 20 years the market is ripe for a credible alternative. It would be a very sleepy Apple CEO who didn't recognise this and make every effort to capitalise on it.