Intel Snags Apple Chip Biz from IBM
CUPERTINO - 06/06/05 - Apple Computer has said it will end a 14-year relationship and discontinue using microprocessor chips made by IBM in favor of chips produced by Silicon Valley-based Intel, according to CNET Networks Inc.'s News.com and The Wall Street Journal.
Officials from Apple, Intel Corp. and International Business Machines Corp. could not be reached yesterday to confirm the report, they said.
The decision is seen as a major risk for Apple Computer as switching over to Intel's x86 chips would force the company's Apple's programmers to rewrite its software to adapt to the new chips.
Sources say Apple intends to shift to Intel chips for some products beginning in 2006 and across the company's complete product line the following year.
"I don't know that Apple's market share can survive another architecture shift,'' Insight 64 analyst Nathan Brookwood told News.com. "Every time they do this, they lose more customers.''
News.com reported that Apple would begin the transition to Intel with its lower-end computers, such as the Mac Mini, in mid-2006 and higher-end models a year later.
Apple's break with IBM stemmed from Jobs' wish that IBM make a larger variety of the PowerPC processors used in Macintosh systems.
IBM balked because of concerns over the profitability of a low-volume business, News.com reported.
By wrestling away Apple's business from IBM, Intel tightens its stranglehold on the PC processor business. The company holds more than an 80% share of the market.
Although IBM will undoubtedly suffer a setback with the loss of Apple, the company is expected to reap a financial windfall after signing up Microsoft, Nintendo and Sony Corp. to use PowerPC technology in future video-game machines, industry analysts say.
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