Steve Jobs confirms rumors - Apple to transition to Intel CPUs

San Jose (CA) - PowerPC-based Apple systems have been crushing Pentium-based computers in terms of performance for years, at least if we believe Apple CEO Steve Jobs. Now it appears that the PowerPC CPU was not enough anymore, as Jobs confirmed a complete switch to Intel CPUs by June 2007.

It wasn’t quite the bombshell announcement it could have been since several reputable media outlets had reported about a possible Intel-Mac during the past weeks. But it certainly was stunning news what Steve Jobs had to tell attendees of the WWDC 2005 : Apple will start using processors of the very company Jobs has been continuously bashing at every introduction of a new PowerPC processor.

According to the executive, the transition will begin in June 2006 and is likely to be completed by June of 2007. Starting today, Apple is offering a $999 "developer transition kit" including a 3.6 GHz Pentium 4 processor. Intel said it plans to provide industry leading development tools support for Apple later this year, including the Intel C/C++ Compiler for Apple, Intel Fortran Compiler for Apple, Intel Math Kernel Libraries for Apple and Intel Integrated Performance Primitives for Apple.

"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," said Steve Jobs. "It’s been ten years since our transition to the PowerPC, and we think Intel’s technology will help us create the best personal computers for the next ten years."

According to Jobs, PowerPC and Intel apps will be supported "for a long time" on upcoming systems. Key to this strategy is "Rosetta", an emulation layer that is capable to run PPC-compiled applications on an Intel platform. Of course, Jobs had demonstrations ready to run which showed Mathematica, Photoshop as well as Excel run without any apparent performance impact. Jobs talked briefly about the next MacOS X, code-named "Leopard", but it was not clear, if this version will already be running natively on an Intel chip.

There has been speculation about the reasons for the transition and Jobs did not give a detailed answer during his keynote, besides the notion that Apple wants to make the "best computers" for its customers and IBM did not reach the 3 GHz mark for the G5 processor. Dean McCarron, analyst with Mercury Research, said that Intel likely provided a better product outlook than IBM. "The announcement is not wholly unexpected, since this decision is based on Apple wanting a long-term roadmap with higher performing products."

While Apple will improve its competitiveness with quicker access to faster chips, Intel will also be profiting from Apple’s decision. McCarron said it is an "additional customer" that currently accounts for only 1.5 to 2 percent of all computer shipments, but offered growth potential for the future - and in the end, growth potential for chip sales is what Intel is looking for. However, Intel is likely to also take advantage from the positive reputation Apple enjoys with creative users and the consumer electronics industry. Apple PCs are mainly bought because of their design and style. If Intel can find a way to bridge its products convincingly to Apple’s brand it may be a lot easier to market consumer electronics such as Entertainment PCs and win more friends in the creative segment such as graphic designers.

The Apple user is left with a big question mark with today’s announcement. Should the average Apple user who defended its brand against the Wintel world for years be happy or sad ? In the end, Apple could have gone with AMD as well - a brand that carries more enthusiasm than Intel.

Analysts do not think there will be a long term negative impact on Apple. "Apple does not sell just a processor. It’s a complete package," said McCarron. The challenge will be to keep the Apple image with being the processor to be used as a tool to offer the "best product," as Jobs said. Ultimately, Apple users tend to forgive Steve Jobs almost anything, whether it is a questionable mistake or a cover-up of a failed product strategy. So, even breaking with a big part of the Apple religion was not greeted with huge criticism so far. There was even speculation, if Apple intentionally planted the transition story in media to soften the impact of the announcement and get its customers used to the idea of buying an Intel chip in the future.

The big loser in this game is IBM. The company indicated its irritation about the Apple-Intel rumors in conversations with Tom’s Hardware Guide and has good reason to be concerned. It’s not the unit count IBM is losing, it’s much more the reputation. A prestigious customer such as Apple can send a signal to other firms. However, McCarron believes that IBM may be "disappointed" but continue to use the PowerPC chip successfully in other products - such as the Cell program. embedded appliances or the upcoming Xbox 360.