06 June 2005 Computer maker Apple is expected to announce today that it will start using Intel’s processors in its personal computers, potentially signalling an assault on the mass market..
According to industry insiders, Apple has started briefing its partners about plans to use Intel’s chips in its range of Macintosh computers. Apple currently uses PowerPC processors, made by IBM and Freescale Semiconductor.
The move to lower-cost Intel chips would be a significant volte-face for Apple, which has rebuilt its business on the basis of high-quality, highly stylised products. The wholesale move to Intel chips is likely to signal that Apple has its sights set firmly on the mass market.
Apple has recently shown some signs of softening its design-heavy, premium price approach, introducing its pared down Apple Mac Mini – a cheap, basic computer that comes without peripherals such as displays or keyboards.
The decision to switch to Intel chips could enable Apple to further increase its market share by bringing cheaper, faster laptops to market. It has already succeeded in leveraging the success of its iPod and music business to gain traction in the PC market, and analyst firm Gartner reports that in the first quarter of this year, its Macintosh PC shipments grew by 45% in the US, placing it fifth in the US market.
But analysts point out that Apple may not ditch IBM’s PowerPC chips entirely. Such a move would make little sense coming so soon after IBM had agreed deals with Sony, Microsoft and Nintendo to use the chips in their next generation games consoles – a move that will see the chips go into mass production.
“Our advice to Apple is this – If Intel has offered you such a good deal (and we know Intel would have pulled the stops out) then by all means adopt a dual architecture strategy. But to defect from one processor architecture just as it seems about to take off to one that may have already peaked doesn’t make any sense to us at all,” says Gary Barnett, Research Director at Ovum
Apple CEO Steve Jobs is expected to discuss the move in his keynote speech at Apple’s Worldwide Developer Conference in San Francisco later today.