“When IBM sneezes, Apple catches a cold, goes one variation on the old saw. As the maker of the PowerPC chips that run Apple’s G5 desktop computers, IBM (IBM ) is Jobs & Co.’s most important supplier. In fact, Apple has more or less staked its computing future on the G5 line, produced largely out of IBM’s Fishkill (N.Y.) facility. Now, IBM is struggling to produce cutting-edge G5 chips of sufficient quality in sufficient quantity, and the upper half of Apple’s hardware lineup is in limbo,” Alex Salkever writes for BusinessWeek.
“Apple is frustrated with delivery delays of new G5 chips, cast with circuit widths of a mere 90 nanometers. That’s 30% smaller than current G5 chips with 130-nanometer circuits. The upcoming chips will also run faster and much cooler. Apple needs these before it can finalize its much-awaited G5 PowerBook,” Salkever writes. “The problem goes beyond laptops. In a worst-case scenario, sales of Apple’s top-of-the-line G5 PowerMacs will continue to languish, as buyers hold out for the speedy new chips. The delays in G5 progress may also force Apple CEO Steve Jobs to eat some crow. He had sworn to have a 3-gigahertz G5 desktop on the market this summer, something that looks increasingly unlikely.”
“Some experts still hold the view that in the long run, the IBM chip production problem is a blip and that Apple still looks smart for having thrown in with Big Blue. Fears that IBM’s chip production problems are serious are seriously overblown, IBM Senior Vice-President and Chief Financial Officer John Joyce said in a recent conference call. And IBM has started to see much higher yields at its Fishkill plant lately, which means IBM’s engineers are pretty close to ironing out the kinks, Joyce suggested,” Salkever writes.
Full article here.