Apple: it's never too late

That's more change underway now than we've seen since Intel introduced the 8088 as downgradeon its 8086 in 1979. But where's Apple?

Everybody's got a strategy. Microsoft is basing it's hopes on using the Nexus DRM technology now being trialed in the X360 to get control of the home entertainment market and then leverage that control to get a whole new OS/HW combination into offices. IBM is betting the farm on providing support services around the low cost, high performance, combination of Linux on Cell. Sun is betting on selling the hardware needed for network computing and next generation Unix.

At the hardware level Microsoft is moving everything to a fairly traditional PowerPC architecture because that's cheap enough, fast enough, and secure enough, for their needs in what is primarily a software and marketing based strategy. IBM is betting on Cell, basically a PowerPC grid on a chip largely because it provides the ability to build extremely fast, and extremely cheap, systems simply by plugging in highly standardized components all of which run the same applications under the same OS. Sun is betting on pushing Solaris further into the hardware to get both greater throughput and lower costs in what will become a componentized SMP on a chip architecture allowing enormous flexibility.

That's more change underway now than we've seen since Intel introduced the 8088 as downgrade on its 8086 in 1979. But where's Apple?

Apple's global business strategy is pretty clear: simualtaneously leverage and build the brand to get and hold a lead in integrated electronic entertainment.

That wouldn't actually require Apple to make a PC, but of course the company's image is directly affected by the public's perception of the computer products as both high end and insanely great. Thus the market simply isn't ready for Apple to drop out of the PC business - doing that would irremediably hurt the company's public image and thus the value of the brand they're trying to leverage.

Two years ago Apple faced a strategic dilemma: continuing with IBM meant adopting Cell and eventually competing head to head with Sony in the critical home electronics market - while fighting both IBM and Toshiba in the PC business. Most importantly it meant virtually handing over future product direction to IBM, and so last June we saw Apple chewing off it's metaphorical leg to get out of that trap.

Unfortunately the Plan B they had kept alive since first agreeing to work with IBM on the G5 hadn't really been updated and reviewed - it had merely been kept alive, and that plan was Intel: a company with nothing to offer but high cost and deeply encrusted processor designs reflecting decades of adaptation to the Microsoft Windows market.

So what to do?

In the short term it's perfectly reasonable for Apple to do what it told its customers it would do: continue with PowerPC for at least the first half of 2006. In the longer term the simpler options include partnering with Freescale or working with chip designers like PA Semi and contracting production to people like TI.

A more interesting option, however, would be to partner with Sun and switch to Solaris on SPARC.

From Sun's perspective Apple would bring volume and high end desktop credibility, enabling the company to offer top to bottom IT infrastructure to its business customers.

From Apple's perspective Sun offers a trap free environment with a hot processor strategy, access to big data center accounts, the best operating system around, and thousands of enthusiastic developers salivating at the thought of getting their stuff on MacOS X.

And, of course, there's very little competitive overlap in Systems and none at all in home entertainment.

Strategically this is a marriage made in heaven, but if you were an Apple executive what would you be most afraid of in a deal like this? Right, getting trapped again - so here's what I said about that about 18 months ago:

Most importantly, SPARC is an open specification with a number of fully qualified fabs. In the long term Apple wouldn't be trapped again and in the short term the extra volume would improve prospects for both companies.

And here's a bit from Sun's December 6/05 Niagara press release

Today, Sun also announced plans to publish specifications for the UltraSPARC-based chip, including the source of the design expressed in Verilog, a verification suite and simulation models, instruction set architecture specification (UltraSPARC Architecture 2005) and a Solaris OS port. The goal is to enable community members to build on proven technology at a markedly lower cost and to innovate freely. The source code will be released under an Open Source Initiative (OSI)-approved open source license.

It's a great option for Apple: differentiation, performance, markets, and freedom in one package.

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