IT consultant: Apple Intel-based Macs coming later than you think

18 years ago

“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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