Why Apple Switched

Why Apple Switched

Summary: "We’re thrilled that we seem to be in stock in most places, which is something we didn’t do before."

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TOPICS: Apple
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Steve JobsSince Paul and Joe have both discussed Apple's move to Intel let me explain in one word why I think the decision was made.

Supply.

I heard it near the end of an interview Steve Jobs conducted with CNBC's Ron Insana right after yesterday's announcement. He was asked about the success of the iPod and iTunes, where Apple has an 80% market share rather than the 3% we're used to in the PC world.

Here's what Jobs said, from my notebook.

"We’re thrilled that we seem to be in stock in most places, which is something we didn’t do before."

How many sales has Apple lost over the years because supplies were tight or just expensive? Neither Motorola nor IBM could ever supply the quantities Apple needed, at the prices Apple needed, in order to be anything more than a minor irritant to the WinTel suppliers like Dell and H-P.

But the iPod proved things have changed. If your stuff is better now, it's possible to ramp-up production fast enough to hold your lead. IBM could not do that for Apple. Intel can.

Yes, this is reading a lot into a little quote, but you have to parse Jobs carefully. He doesn't say much, and most of what he does say is so heavily couched in happy talk as to be meaningless.

So here's the bottom line. If you saw an Apple on a shelf, at the same price as a Windows PC, or even a little lower, would you buy it?

We're going to find out.

Topic: Apple

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14 comments
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  • pricing is everything

    Does this mean I'm gonna have to learn to drive a Mac?
    pesky_z
  • I would buy a Mac

    Just to have the option of running other programs. There doesn't have to be a need, it can just be a commodity.
    Jake M.D.
  • Demand

    IBM couldn't supply a chip that ran cool enough. They couldn't do special runs for Apple of specialty chips. At its volume, Apple is a specialty chip.
    Or so I read.

    Now Apple switches to Intel, and apparently they're willing to accept less specialized chips(?). This is surprising for Apple, though I'm not surprised Intel does not want to do Apple-only products.

    So this raises the question: why was Apple willing to do with Intel a deal they were unwilling to do with IBM?

    If someone has the answer -- or can correct any misimpressions -- I'd be opleased to read it.
    Anton Philidor
    • The premise may be wrong

      I don't think the issue was so much, "can you do special chips" as "will you get us the quantities we need when we need them?"

      Jobs is making a bid to break out of his niche business. He tasted that kind of success with the iPod. He wants to do it again.
      DanaBlankenhorn
      • IBM is producing large numbers of Power chips...

        ... but not to meet Apple's special requirements for small runs.

        Do you think there's a chance the XBox will run into a chip availability problem?

        If IBM believed that Apple could break out of their niche business, wouldn't they have made the effort necessary to supply what Apple asked?

        If Intel believed that Apple could break out of their niche business, would Apple be obtaining what are apparently standard Intel chips?

        I think that Apple is making a sacrifice to assure availability and lower prices. That can be a worthwhile sacrifice, but it doesn't seem to be Plan A.
        Anton Philidor
    • What does IBM have that would work?

      ---Now Apple switches to Intel, and apparently they're willing to
      accept less specialized chips(?). This is surprising for Apple,
      though I'm not surprised Intel does not want to do Apple-only
      products.

      So this raises the question: why was Apple willing to do with
      Intel a deal they were unwilling to do with IBM?---

      An interesting premise, but Intel has their line of x86 chips to
      offer Apple, a line that they continue to improve and move
      forward with. IBM had no chip that Apple could use, other than,
      of course, the G5, which they'd stopped seriously developing.
      I'm not sure what kind of a deal you think they could make with
      IBM.
      tic swayback
      • IBM would not have "stopped seriously developing"...

        ... Apple's version of the G5 if they thought there was money in it.

        Intel was apparently not even asked to do special chips for Apple.


        Looks to me like Apple had to accept that as a niche player they were going to have to choose from what was available. In that context, they probably made the best deal they could get.
        Anton Philidor
  • Here's my reason why Apple switched

    Apple had only 2% market share

    By switching to Intel and having Apple computers the ability to run Windows, they want to Now they i) have 2% of the Apple market.
    ii) Plus they a share of the Wintel market
    Dell has 30% with a not so good product. Imagine how many people would buy an Apple for their cool designs and be able to run Windows and as a bonus you get to run OS X. I for sure would buy an Apple.
    zzz1234567890
    • Just because you have the same chip...

      Doesn't mean you're interoperable. Apple still seems determined to maintain its proprietary differences with the Windows hardware platform, and I think that can be done, since software runs all the hardware.
      DanaBlankenhorn
      • The comment by an Apple VP...

        ... indicated that an Apple computer could run Windows. A non-Apple computer will not, however, be allowed to run OSX.
        Anton Philidor
  • OS-X on Intel at last :-)

    Apple on Intel could be a great thing for us all. The BSD kernal of OS-X has already been on Intel for a long while, and if OS-X (as a whole) becomes available then I would definiately be interested. The possibility of being able to run OS-X on either cheaper commodity hardware and/or on high-performance Pentium D is very enticing to me. I would definately buy a new system if I knew I would be able run OS-X on it. Furthermore, if the change draws game developers to write for the Macintosh platform then I would be able to drop my Windows machine entirely.

    Right now I have five white-box home-built PCs (running FreeBSD 5, Novell/SuSE Linux Desktop 9, Sun Solaris 10 for x86, and MS Windows XP), a Power Mac 7100 (OS-9), and a Minimac (OS-X Tiger) and this is the first thing I have seen in a long while that makes me want to upgrade ...

    Regards,
    Jon
    JonathonDoe
  • Numbers

    It's all about the numbers. I'm not talking price eather. Look at the ads for a start. IBM is always geared to enterprize ( did love that linux ad) Look at Intel ads, flashy, blue guys, and that little didie tune. Users want the best bang for the buck they spend. End user ask how fast is it? what's the GHZ? Apple has been very inovative in design and Intel inside will be a nice fit to move product. Apple lives because it's willing to always renew itself. IBM couldn't meet the mark Apple wanted and mostly on the low power chip for those sharp laptops. Maybe IBM was too busy falling in love with it's own e-series Z server?
    xstep
  • Its too late...

    I was expecting this announcement when apple started MacOSX based on BSD...
    bookraj
  • It's all about laptops, folks

    Is NOBODY seeing this?

    The simple points, from my perspective:
    - There's no way a G5 is going to run on a laptop anytime soon
    - it's just too hot, and you don't have room / weight available on
    a laptop to cool it like they do on the desktops. Soooo, Apple
    has no laptop future with IBM's G5.

    - Laptops are > 50% of the computers sold these days. No
    faster processor coming from IBM? Can you say "Sales of Mac's
    are about to tank?"

    I'm amazed people are making such complex reasons up for the
    switch when this one is so friggin obvious. Am *I* missing
    something?
    batsonjay