Apple Move to Intel Might Affect Its PC Market Share

Apple Computer's (Nasdaq: AAPL) announcement yesterday that it intends to move its hardware platform from processors made by IBM (NYSE: IBM) to those made by Intel (Nasdaq: INTC) created a big splash in the Macintosh world and the media, but some analysts question whether it will have an impact where it counts most: on the Cupertino, Calif., computer maker's share of the personal computer market.

Mike Cherry, lead analyst for the Windows operating system at Directions on Microsoft (Nasdaq: MSFT) in Kirkland, Wash., questioned the ability of a processor to draw users to a computer platform. "It's not really clear, even with Intel's advertising, whether people buy machines because of what processor is inside or whether they buy them because of the price and the applications that run on them," he told MacNewsWorld.

"People will decide whether they want Windows versus Apple based on what applications are available for it," he added.

Earth Not Moving

"A lot of people are making a lot about this news, as if it were some major earth-moving change, as if it were going to change the way people purchase machines," he observed. "I just don't see that."

He noted that the fact Apple's operating system, OS X, and the dominant operating system now running on Intel chips, Microsoft Windows, will be running on the same processor in the future won't necessarily be attracting more Windows developers into the Mac market.

It might be easy to do a simple transport of a Windows application to another platform, he noted, but rarely does that fully exploit an operating system. "Exploiting an operating system usually takes more work," he explained.

Market Lost in Rounding

"It may not be enough that they are on the same processor," he said of Apple and Windows developers. "There's still a layer between the application and the processor, and that's the operating system."

Nathan Brookwood, principal analyst with Insight 64 in Saratoga, Calif., added, "For most Windows developers, the Macintosh market is so small, it disappears in rounding errors these days."

He told MacNewsWorld that while in the long run, Apple's move to Intel might be aimed at getting more Macs into homes and offices, in the short term, just the opposite will occur.

Buyers in Limbo

"I think that the only people interested in buying PowerPC Macintoshes between now and the end of their life are people who absolutely can't defer the purchase," he said. "There are probably a lot of people who don't want to be the last guy to buy a PowerPC-based Macintosh."

"Anything that has a PowerPC in it coming from Apple over the next 12 months will receive a tepid response from the market," he maintained.

Moreover, when Apple makes these transition changes, history has shown that their customer base takes a hit, Brookwood said. "This is the third time that they've changed processor architecture, and every time they do that, a bunch of customers conclude they don't want to do it again," he noted. "As a result, not all of the current customers will still be customers when this transition is done."

Burgeoning Opportunities

"Some will turn to Windows so they don't have to do something different three or four years down the road when Steve Jobs gets a different technology flash in his head," he declared.

On the other hand, Brookwood sees some opportunities emerging for Apple by "turning Intel."

If Apple licensed its software to other hardware manufacturers, it could leverage the popularity of a brand like Hewlett-Packard (NYSE: HPQ), for instance, to spread Apple's presence in the market, he said.

However, Apple has vowed it will never sell its software apart from its hardware, a vow Blackwood argues it will have to break in the future. "It's going to have to or else it'll be liable to suits over anti-trust violations," he asserted.

Hardware Allure

"If they build their software to run on PC-compatible hardware, they will ultimately be forced to sell their software separately from the hardware," he predicted.

Another opportunity for Apple, he noted, is to produce Apple hardware that runs Windows software.

"Even though I've been a Windows user for a decade now, I look at the Apple designs and I go, 'Boy, those are nice boxes. They just run the wrong software for me.' If I could buy an apple box that ran Windows on it, I might be a happy camper."