“Quite a number of pundits have gone out and predicted the appearance of Intel based Powerbooks from Apple this January – but it isn’t going to happen. In fact what I expect is either, or both, an Intel based Mini and/or some Intel based iBooks. Beyond that, however, Intel is just not going to happen for Apple next year – no Powerbooks, no iMacs, no Workstations, and no X-Serves,” Paul Murphy writes for ZDNet.
“Unfortunately there are two big problem sets: one is pricing, the other availability. Of these, availability issues are the least flexible but also the easiest to finesse, at least in the very short term. Apple needs the new instruction set extensions promised for the ‘Yonah’ architecture both for performance and to support its ‘best efforts’ hardware copy protection on MacOS X. Unfortunately, ‘Yonah,’ even in its first 32bit incarnation, isn’t ready and its full implementation successors, ‘Woodrow’ and ‘Merom,’ keep getting further and further behind schedule,” Murphy writes. “Pricing, in contrast, is a simple rocks and hard places choice. Right now a $999 list price iBook sells in volume for something closer to $699 and earns a small but positive margin for Apple. The PowerPC G4 in that machine has a typical volume price of around $72, or about 10% of the selling price for the machine. In comparison people like Asus, Quanta and Hon Hai Precision (who make Dell, HP, and IBM gear) pay Intel on the order of $240 per unit for the two year old, 32bit, 1.8Ghz Pentium M predecessor to the ‘Yonah’ line.”
“It’s not possible to make money selling iBooks in which the wholesale CPU costs amounts to more than one third of the typical selling price,” Murphy writes. “Something has to give here: either Apple has to significantly raise prices in public or cut everything else to the bone. Unfortunately raising the price significantly isn’t acceptable in the market, so if Apple wants to do sell Intel what they’ll have to do is accept lower product quality in other components and a higher DOA rate out of the plant gate, settle for a two year old, 32bit, chip without the new media instructions characterising the ‘Yonah’ architecture, cut its plant gate margins on the product, and reduce discount levels available to volume buyers. In other words to hold the list price constant on the iBook in the face of such a massive cost increase for the CPU, they’ll have to reduce both customer discounts and their own margins, take a big downstream hit on component quality, and give up on CPU level MacOS X authentication.”
“The obvious answer [for Apple’s dilemma] is to stick to PowerPC for another generation – pushing the first Intel products into 2007. IBM has a low power (13 Watt) G5 that would be a big winner in new PowerBooks, and Freescale’s 8641, a dual-core PowerPC G4 with integrated system logic and four Gigabit Ethernet media-access controllers, offers exactly the price/performance combination Apple needs to give both the iBook and Mini big performance boosts without changing retail price or cutting their own margins,” Murphy writes. “Sadly, however, good sense isn’t that likely to break out where personalities are on the line -instead we’re more likely to see Apple spend money along with both customer and developer loyalty on building enthusiasm for Intel solutions that are virtually guaranteed to eventually gut the company financially.”
Full article, with much more and highly recommended, here.
MacDailyNews Take: Quite a brutal outlook, huh? Choose between a delayed conversion to Intel for the full lineup of Mac models or lower quality-controlled Macs with no CPU-level ability to keep Mac OS X only on Intel-based Macs, or, the best option presented by Murphy, stay with PowerPC until Intel’s ready. Why do we think that Apple and Intel have a better plan than any of these options presented by Murphy? Because they’d better have a better transition plan, that’s why.
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Related MacDailyNews articles:
Apple resellers in the dark about Intel-based Mac transistion plans – December 03, 2005
Should you buy a new Apple PowerBook G4 now or wait until they have Intel Inside? – December 03, 2005
It’s official: Apple CEO Steve Jobs to deliver Macworld San Francisco 2006 keynote address – December 01, 2005
Citigroup: Intel-based PowerBook in January, Apple target price raised to $71 – November 30, 2005
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Apple better have a transition plan. Otherwise, it’s going be a long road to (insert sarcasm, remark…) …
Such a grim outlook for MWSF 2006.
1st.
Post.
Oh, FUD. Not 1st.
Murphy,
That’s Irish isn’t it?
Aplogies to all my irish friends, just using an old analogy.
Spud Da Vinci
I was personally told by an Apple Retail executive that these will be announced at MacWorld and ship around the end of January. But maybe this pundit is carrying water for Apple so more folks don’t wait for the new hardware.
Besides, how much software is going to be re-compiled and/or re-written for the Intel architecture? And how good/fast is Rosetta, anyway? It may be better for some to hold off even after Apple begins releasing hardware with Intel inside.
Sometimes a dose of reality is all the Think Secret’s of this world need to make them shut the Fock up.
They are trying to build up impossible expectations to see them dashed on the rocks at Macworld Expo.
You’d think they had an axe to grind or something.
AJ, I believe Apple has a plan, but what it is or how good it is remains to be revealed to us. I, for one, really hope that Apple does a better job of marketing its OS and computers than in the past or even now.
Even Dell with their crummy boxes advertises them as if they were the best ever made. Microsoft does the same with its second rate OS.
Apple makes great products and need to market them to drive sales higher.
This guy Murphy must be on the Apple board to let out such revelations!!!!
He had better watch out when Steve hears he has spilt the beans!
The whole Murphy Furphy is just that, a load of old cobblers. SJ has a plan with Intel and we are not part of that plan and neither is Mr.Murphy. They will arrive when they arrive, specualtion or no apecualtion, and they will be magnificent machines and we will all rejoice. there is no way Mr. Jobs will allow anthing on to the market that is not better than we already have. End game……..
Da Vinci
At least this person has hard numbers that make sense instead of simple, Apple will deliver in (insert year).
we’re screwed!
So is this person seriously proposing G5 PowerBooks? But I thought the G5 PowerBook rumors were finally stopping.
Oh, and Tom’s Hardware has a general overview of Intel’s roadmap for the next two years.
http://www.tomshardware.com/cpu/20051203/index.html
Yonah1 is mid 2006, but Yonah2 is early 2006. I would imagine the iBooks will be Yonah1 (single core) and the PowerBooks will be Yonah2 (dual core).
Paul Murphy is no dummy. Stay with IBM/Freescale until Intel switch is realistic!
I haven’t read the full article, but if Dell, HP etc are paying so much for Intel chips then how do they even begin to break even on their machines let alone make a profit?
I love it when an idiot puts 1st post only to come in second or third.
IT consultant = guy who puts the toilet paper on the little spools in the computer room crapper
this is completely off-topic, but how do I make clickable web addresses show up in a post? Isn’t there a little code snippet or something?
I don’t understand his analysis. First he predicts that the only possibility is for an Intel Mac Mini or iBook, then goes on to explain why the processor is too expensive for an iBook.
I would assume that this raises the probability of an Intel Powerbook, where pricing is not as much of an issue.
It’s all predictions anyway, which is part of the rampant speculation that will only increase as we get closer to MacWorldExpo.
Unless, of course, he has some deeply-embedded supersecret mole in Cupertino or Santa Clara… and we all know how well that goes across in Cupertino!
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Murphy’s outlook doesn’t make sense. First of all Jobs is smarter than that. If he knew Intel was behind on the kind of processors that Apple needs sooner than later he would not have struck the deal this soon and announced it this early. Although I don’t believe any intel Macs will come out in January I do think at least one or two models most likely the current generation of Pentium M’s will come out for the Powerbook line. There good enough to work right now. I think Murphy is just another PC person who wants nothing better than for Apple to fail and also discourage us Apple folks by putting out negative FUD. Like I said the only thing I partially agree on is that Intel Macs may not be released as soon as MacWord S.F. 2006.
Steve Jobs himself said that the transition to Intel will not be complete until mid-2007, so whether or not this guy’s article is true, it’s really no news.
progeny–
Use html.
<a >Danke Schoen</a>
dang…
If Murphy is right, I can’t help but wonder why on earth Apple wants to dump PowerPC processors.
Unless Intel is wanting to see Apple screwed, his scenarios aren’t going to happen.
Might be fun to speculate with conspiracy theories that Intel is in cahoots with MS to bring Apple down…
…but that’s plainly not the case. Intel will go further out of its way for Jobs than for anyone else at this juncture.
I hope this is not why Apple signed that recent contract with Motorola.