PowerPC, x86, and Apple pricing

since buyers are pretty good at doing arithmetic it seems reasonable to assumethat Apple's sales will increase as people stock up on PowerPC products, and then fall through the floorwhen the x86 boxes hit the shelves.

Apple's latest G5 workstation offers two dual core G5 processors at a price point no different from the older units - so low that it says something interesting abut Apple's announced plan to go x86 in the future.

Here's a comparison between the latest PowerMac and IBM's closest technical equivalent:

IBM: IntelliStation® POWER 285 (9111-290W) Apple Power G5 Quad
$16,103.00 $4,399.00
2 POWER5+ /1.90GHz dual core
1.9MB L2 and 36MB L3 cache
4GB RAM 533MHz DDR2 SDRAM
2 x 73.4GB Ultra320 10K rpm
Dual ported Ethernet 10/100/1000 Mbps controller
Dual channel Ultra320 SCSI controller
Two USB, two HMC
2D graphics: GXT135P (16MB frame buffer)
AIX 5L Version 5.2 or later
2 PowerG5/2.5GHz Dual Core
1.25GHz frontside bus per processor
1MB L2 cache per core
4GB of 533MHz DDR2 SDRAM (PC2-4200)
DUal 10/100/1000 ethernet, USB, etc
250GB Serial ATA hard drive
16x SuperDrive (double-layer)
Three open PCI-Express expansion slots
NVIDIA GeForce 6600 with 256MB GDDR SDRAM
MacOS X, Linux

It's not obvious which of these has the faster hardware or for which jobs each would have an advantage. The Power5+ is a screamer, but the G5's short array processor should trump it for well written software. Furthermore the Apple machine is an integrated, consistent, design matching memory and I/O capabilities to the CPUs but IBM's workstation is fundamentally designed for the Power4 generation.

Thus Apple's G5 workstation is part of a pre-press and multimedia-ptimized architecture intended both for stand alone use with applications like Aperture (on which more tomorrow) and for production use on video image processing in environments with X-serve/X-raid backends. IBM's machine, in contrast, is limited to AIX and so focused on sales to captive developers and first tier customers using it.

Since Apple has said that the PowerPC is its past, and Microsoft has said the PowerPC is its future, it's interesting today to to look at what these two workstations do, and what they cost, relative to the most nearly comparable x86 products.

IBM: IntelliStation A Pro (621747U) Sun W2100z
$11,439.00 $9,485
AMD Opteron Model 254 2.8Ghz
8GB PC2-3200 CL3 ECC 400Mhz DDR-2 SDRAM RDIMM
Integrated Dual Channel Ultra320 SCSI,
Integrated Serial ATA
2D/3D NVIDIA Quadro FX 4500 PCI ExpresS
US160 73.4 GB
RED Hat 1Yr. pre-loaded
2 AMD Opteron Model 252 Processors
1-MB On-Chip L2 Cache
4-GB Memory
73-GB 10000 RPM Ultra320 SCSI Disk Drive
Quadro FX4000 Graphics Accelerator
DVD-ROM/CD-RW Drive
10/100/1000 BaseT Ethernet Port
5 USB Ports
2 Serial Ports
1 Parallel Port
5 PCI-X Slots
Solaris 10/JDS Pre-Installed

In the PowerPC workstation comparison, the price ratio is about four to one with IBM nearly $12,000 more than Apple. Compare the two x86 machines, however, and the pricing ratio between Sun and IBM is close enough to one to one, with IBM's machine only $2,000 more than Sun's and almost half of that accounted for by Red Hat.

It's easy to speculate that the lack of competition, not production cost, accounts for the $12,000 price premium IBM wants for its Power5+ workstation relative to the PowerMac. The more interesting question, however, is why Sun's machine costs more than twice as much as Apple's.

The Opteron workstation market is extremely competitive - if either company could see a way to knock a few dollars off their pricing, they'd do it - so why does the cheaper of the two still cost more than twice as much as the PowerMac?

The answer, I think, is that the PowerPC line is the world's highest volume line overall and correspondingly dirt cheap - that's why Microsoft expects to sell their 360 games machines, complete with case, software. memory, and a custom three core PowerG5 derivative running at 3.2Ghz, for less than the wholesale price of a mid range Xeon.

There's a simple bottom line: barring a miracle, Apple will be no more able to hit this price point with an x86 machine than Sun or IBM can -meaning that their customers will be in for a rude price shock if, or when, Apple does make this change.

And that has a corollary: since buyers are pretty good at doing arithmetic it seems reasonable to assume that Apple's sales will increase as people stock up on PowerPC products, and then fall through the floor when the x86 boxes hit the shelves.

(I know, I know, everybody knows PCs are cheaper - but of course it's not true. Take a good look at any high performance system available from Apple's on-line store and then price out a Dell with a similar configuration. I promise you'll be surprised: apples to apples, Apples are cheaper.)