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TechNewsWorld.com

Apple-Intel: Marriage Made in Heaven?

By Pam Baker MacNewsWorld ECT News Network
Mar 29, 2007 4:00 AM PT

Apple's announcement that it would be putting Intel inside its computers was initially met with an uproar of protest.

Apple-Intel: Marriage Made in Heaven?

"True Apple followers resented Apple's use of Intel and the appearance of moving closer to Microsoft," Michael Silver, analyst at Gartner research firm, told MacNewsWorld, "but they need not fear Apple will resort to producing mere clones."

Wedded Bliss?

Now that the dust has settled, it seems the fears of die-hard Apple fans may have been unfounded. The Rosetta translator has been improved and now boasts increased speed; compatibility with classic Mac apps has been achieved through updates or emulation; the worries over increased susceptibility to viruses have been calmed; and the company managed to pull off the transition within the deadline it set for itself. Plus, Apple has retained its individuality and branding focus throughout the process.

"Apple's strategy remains on producing higher-end machines," notes Silver, adding that the company is unlikely to make its operating system available for use in other machines.

Still, skeptics worry that this rosy path may eventually lead to a thicket of thorns, even though there are no signs -- yet -- of prickling obstacles on the path ahead.

"I just don't see a problem here," Peter Kastner, vice president of enterprise technology at Aberdeen, told MacNewsWorld.

Indeed, he sees the Intel move as a boon to Apple's growing fan base.

"With easier virtual processing between OS X and Windows XP, more people are buying a Mac," Kastner observes. "Sales were up four times the industry average in Q2-2006."

A Marriage Of Convenience

"Apple is Intel's best buddy since Dell added AMD to its product line," says Kastner. "That makes Apple's laptops, desktops and servers the only all-Intel product line of a major U.S. PC vendor."

That's not to say that the relationship is built on true, everlasting love. "It's a marriage of convenience," Simon Yates, a research director at Forrester, tells MacNewsWorld. "It's not much more than a branding partnership."

Intel gets some much-needed PR from the deal, Yates says, and Apple gains smaller costs and bigger profits. Neither is likely to net huge revenue gains.

Dowry Payoff

Even though AMD successfully courted Dell, Intel has 85 percent of the PC computing chip market. "AMD is doing well, but the major players still build on Intel first," Yates notes.

Considering Apple's relatively small share of the PC market, he points out, Intel won't see much of an increase in its revenue from the deal.

Apple will see more flexibility and more consistency than it got from IBM, Yates adds, but its only gain will be in higher profits gleaned from using cheaper chips.

Still, give Apple an inkling of an opening in any market and it's likely to deliver an iPod punch.

Honeymoon Holiday

It's possible the Apple-Intel relationship will lead to new opportunities down the road that could build Apple's muscle for another challenge to archrival Microsoft and its PC legions.

However, it's also possible that Apple could move closer to Microsoft in the process.

"Over time, Apple will be forced to move to more virtualization and will end up providing even more MS compatibility," predicts Gartner's Silver.

Apple fans are likely to harbor suspicions in the near term, but "hopefully, they will eventually accept that Apple machines are arguably faster with the Intel chips and now enjoy a broader level of support -- and that these are good things," says Silver.

"It's still the very early days, but so far the marriage is working well for both companies," remarks Forrester's Yates.


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