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What is the Intel Switch Costing Apple? 531

Posted by Zonk
from the best-atm-interface-ever dept.
SenseOfHumor writes "A Business Week article says that it costs Apple $898 for an Intel iMac before loading it with software and packaging. From the article: 'But for Apple, the switch to Intel chips is less about saving money in the short term, and more about hitching its wagon to Intel's longer-term product road maps, particularly in the area of notebooks. IBM's chips are power-hungry and generate a lot of heat, and therefore not suitable to notebook computers.'"
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What is the Intel Switch Costing Apple?

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  • by Anonymous Coward on Thursday January 19, 2006 @12:30PM (#14510142)
    In the mid 1990s, Apple showed the famous picture of a Pentium grilling a hot dog and claimed Intel's chips were power hungry and ran hot compared to the nice cool sleek PowerPC. That was one of the supporting reasons that Apple ostensibly switched, according to all the engineering presentations at WWDC. So when did this change?

    The main reason of course was that RISC processors were on a much faster performance incline than the fuddy duddy old CISC processors like the x86 line. The graph comparing the two in the period 1995-2005 showed CISC acceleration continuing to slow and RISC acceleration continuing with, I believe, a skyrocket attached to the top of the graph. We all know how that turned out.
  • by patman600 (669121) on Thursday January 19, 2006 @12:31PM (#14510152)
    Wasn't this the publicly stated reason for switching when Steve announced the move last summer? They said IBM makes great server chips, but the future of personal computing is laptops, something Intel is putting more R&D into than IBM, and thus provides a better solution.

    why is this news?
  • by PornMaster (749461) on Thursday January 19, 2006 @12:35PM (#14510201) Homepage
    OK, we know that Apple uses desktops and laptops to justify the switch to Intel, but what does this bode for the future of the Xserve line?

    If Apple's going to be commodity CPU on the server front, then there's no incentive on the hardware front to pay for Apple.
  • Cool (Score:2, Interesting)

    by umbrellasd (876984) on Thursday January 19, 2006 @12:35PM (#14510204)
    Wasn't so long ago that people were touting the RISC design of PowerPC as a big power saver. Fewer instructions, less heat. The first iMac was the one of the quietest computers I had ever owned; I recall the Apple IIe being similar. I guess that changed, but I do not know when.

    The Cell processor is an IBM creation. Several are going into the Playstation 3, so will this require a fan? Seems IBM is still building cooler chips and Intel is not the only one that cares about it.

    Don't really have the details. Just wondering what happened. The context of TFA was that IBM just could not "do it" for Apple in the cool laptop department, so they jumped ship.

  • by SoupIsGood Food (1179) on Thursday January 19, 2006 @12:42PM (#14510273)
    This is why I'm confused about the push to "All Intel, All the Time!" Apple, with Mac OS X's Unix and NeXT roots, should embrace a multi-platform strategy to get the most bang for its buck wherever it can. The PowerPC-derived Cell will rock for workstation and servers, and the Meron will kick major butt for home user kit. Best tool for the job, and just compile for the famous NeXT "Fat Binary." Back in the day, the same NeXT executable would run on 68040, Sparc, PA-RISC and Pentiums. Why not now? Why tie yourself to x86 alone, when there are better alternatives to fit the niche you're targeting?

    Too much politics, and not enough engineering.

    ~ SoupIsGood Food
  • probably never. (Score:2, Interesting)

    by Shivetya (243324) on Thursday January 19, 2006 @12:45PM (#14510300) Homepage Journal
    I don't think its going to happen.

    I think the Mac is on Intel simply because there was little else to do to generate new sales momentum. By going to Intel it is implied that people with the older technology will buy new Apples, thereby increasing sales and making Apple's bottom line look better. This will work in the short term but long term where is the excitement going to come from?

    What do Apple computers do that Microsoft computers don't that will appeal to the general computing populace? Computing is probably too strong a term, most aren't doing more than email and surfing. Games are probably the next strongest category for most PC users. So who are they getting sales from? Simple, the Apple faithful. When those run out where do they go for more?

    Corporations aren't going to switch. Most are tied by vendor now. In our case we have windows because Dell supplies on Windows PCs. We had HP before and that was because HP supplied Windows only PCs. We don't even look at Apple. Windows is entrenched here and got that way because there was no viable alternative.

    Why would the general populace ever want to buy a Mac? You can talk it up all you want but the bottom line is price. If all the GP is doing is surfing/email/IM they are defintely going to be harder to sway. Photography? Nah, most people never use more than the basic features of most products.

    With the migration to Intel the "Mac Tax" is more evident. This puts pressure on the geek market. Many of us would like to have a machine to run OS/X. That word "machine" is key. I'm not buying an Apple unless I can use another OS on it. My first preference is that it boot Windows as that is what I need at work and for home use. Next is Linux. So why would these new machines appeal to me? Outside of the mini the new ones will be too expensive for something just to play with.

    I'll be very curious what the sales look like 1 year after the switch is complete. It is obvious most sales will be to the faithful. I just don't think they can convince the general computer populace to switch because of the obvious cost difference. Look, they couldn't convince them the premium was worth it before, how are they going to do it now when "smart consumers" can not compare Apples to Apples?

  • by ivan256 (17499) * on Thursday January 19, 2006 @12:55PM (#14510407)
    that most likely brings the costs way up from where the article puts them!

    Actually, why do people keep believing articles like this where "expert analysts" predict the manufacturing costs of some given electronic product? There is almost never documentable evidence that they are right, and frequently they can be shown to be horribly wrong in hindsight.

    The fact of the matter is that when a successful company brings a product to market, it's usually because they figured out how to make it cheaper than was generally possible before, thus enabling them to turn a profit. Apple has a tremendous history of this, and almost every time an analyst predicts that an Apple product costs a small fortune to manufacture, Apple turns around and posts industry high profit margins that blow away the analyst predictions.

    Analysts pull this same crap with video game consoles, and all sorts of other next-generation electronic equipment made up of multiple components. Any manufacturer that ships any signifigant volume of product doesn't pay anywhere near the bulk prices that component manufacturers publish. Do you think Dell is paying Intel anywhere near their published thousand-unit prices? Then why should this analyst think apple is?

    plus the physical plant

    Apple doesn't own the plant.

    R&D

    Research and Development aren't manufacturing costs.
  • Brainiac design (Score:5, Interesting)

    by argent (18001) <<moc.agnorat.6002.todhsals> <ta> <retep>> on Thursday January 19, 2006 @01:02PM (#14510483) Homepage Journal
    The G5 is a "brainiac" design, a big complex chip with a long highly parallelized pipeline. This is a relatively new approach for RISC chips, which have typically concentrated on a small core, short pipeline, and simple design with a lot of "close" cache.

    Intel's Pentium chips have all been "brainiac"s to some extent, but none so much as the P4... which they've backed away from. The new chips in the new Macs are less like the G5 or P4 and, while not exactly as clean and tight as the G4, are closer to it than they are to the real brainiacs.

    But there's nothing wrong with the G4 core as a core. Taking the G4 core and giving it a faster bus, the way Intel's taken the PII/PIII core and given it a faster bus in Yonah, would have made a lot more sense. And Freescale's got one like that in the pipeline. They could have called it the "G5 Mobile". :)
  • Re:smart move (Score:2, Interesting)

    by Professor_UNIX (867045) on Thursday January 19, 2006 @01:07PM (#14510524)
    i think i read soewhere that notebooks are overtaking desktops in sales. where i work %75 of the people have notebooks. (out of 50)


    What really makes that possible is USB IMHO. Up until a few years ago it was basically impossible to hook external disk drives up to a laptop if you wanted to expand your storage unless you bought SCSI disks and a SCSI PCMCIA card. Now you can just go home, hook into your USB hub with a single cable and you've got access to your printer, scanner, external hard drives, DVD-RW drives, mouse, keyboard, webcam, etc. The only place it really makes sense anymore to use a desktop is if you're a gamer or an avid upgrader and like to swap out your motherboard/CPU/memory/video cards every once in awhile. It's just so much more convenient to grab a laptop and go sit on the couch and work instead of being tied to my office's desk.

  • Its just economics (Score:2, Interesting)

    by antielectron (764068) on Thursday January 19, 2006 @01:08PM (#14510529)
    For people wondering why Apple introduced the high end MacBook Pro line first, and is still offering the G4 based line of Powerbooks and iBooks - the high initial cost of the Intel chips is precisely the reason. The chips aren't much cheaper (and neither as manufacturing costs) for notebooks offered at much lower price points.

    Its a good business strategy - ultimately Apple needs to watch its bottom line while it goes after markets share. As economies of scale, Moore's law [wikipedia.org], and the network effect (more applications get ported to native Intel architecture) kick in in to drive down the costs, we'll likely see the lower-end notebooks within the next 6 months, and the move to Intel processors despite their high initial costs will pay off for Apple very soon.
  • by LurkerXXX (667952) on Thursday January 19, 2006 @01:09PM (#14510540)
    I'm wondering, why Intel?

    Where have you been?

    #1) It's been discussed about a million times that Apple has had issues chip suppliers before producing enough of the desired chips for them. Intel has the fab capacity to handle any requests Apple makes. AMD doesn't. If Apple went to AMD, they would instantly become AMD's biggest customer. That puts a huge strain on production. AMD is pushing their production capacity as is. If I recall, there were recent shortages of the 3800+ dual core chips. That's without AMD taking on a bigger customer than they've ever had.

    #2) Laptops. Laptop sales are growing, and have been higher than desktop sales for the past two years or so. While Intels desktop chips are hot and slow, the Pentium M is a nice fast low-power chip, and slightly better than any of AMD's current laptop chips.

    In a few years when AMD has more fab capacity and maybe a better laptop chip than Intel, I'm sure we'll see Apple thinking about moving over to AMD, or at least offering those as optional chips. Or at least threatening to like Dell to make sure they get a sweet deal on chip prices from Intel.

  • by dasil003 (907363) on Thursday January 19, 2006 @01:18PM (#14510638) Homepage
    No one at the time expected the changes in CISC processors. CISC processors still do have a "complex" instruction set in that they allow multiple forms of adddressing and varying length opcodes. However, internally these chips have become much more RISC-like. The current generation of Pentiums actually does an internal version of dynamic translation from CISC to RISC-micro-ops (which may be 1 or more per CISC instruction) and executes the micro-ops using a different instruction set internally. This internal RISC instruction set is used so central to the design that the L1 I-Cache is not actually a verbatim data cache of the CISC instructions but actually a trace cache of the translated RISC-like micro-ops.

    It really just goes to show the error in the view that RISC and CISC are considered opposite approaches to processor design. The dichotomy was more pronounced in the early days of chip design, but the fact was that proponents of both approaches had good points, and so it was inevitable that modern chips combine the best of both philosophies.

    I think the progress made on the PowerPC architecture is a testament to its viability. The fact that it's even managed to stay anywhere close to Intel/AMD is remarkable given the difference in R&D dollars (I'm just guessing). But the timing of the Intel switch makes perfect sense.

    Consider the switch to the PowerPC in the 90s. It was a time when Microsoft was rapidly catching up to the Mac in terms of UI, and computers were generally underpowered for the common applications that people needed. Gambling on a more promising architecture could have paid off huge if the performance panned out. That never happened, and Apple was in pretty bad shape by the late 90s.

    Now, however, computer performance has reached adequate levels for all the things the common people want... audio, video, web surfing, word processing. We can always use more power, but performance is not such a big deal as it used to be. Since they're not seeking a competitive advantage in performance, it makes sense of Apple to at least assure commodity performance by going with the dominant CPU architecture. Apple has contiunously struggled with supply problems from chip vendors for years, hopefully this will now be behind them, and they can focus on the creative part of their business which is where they've always excelled.
  • Re:Pentium-M (Score:5, Interesting)

    by aaronl (43811) on Thursday January 19, 2006 @01:23PM (#14510692) Homepage
    The P3 design is old (dates back to Pentium-Pro), but it provides more per clock than the travesty that is the P4. It doesn't have constant issues with branch predication failures causing a potentially 24 cycle execution halt, from flushing the pipeline, for example. Compared to P4, it also requires substantially less power to do the same work *and* it's much less expensive to manufacture. The P4 is a bad design, and it's amazing the amount of money they've thrown at it, just to have to keep working on P3 because of the P4 shortcomings.
  • Re:Cool (Score:4, Interesting)

    by BrookHarty (9119) on Thursday January 19, 2006 @01:24PM (#14510699) Homepage Journal
    Well, to be fair, at the time Intel was pushing the heat pump P4 against the PPC. Now intel dropped back to the P3, modified it, called it the pentium-m, now the duo-core. They had to do a 180 and rethink their roadmap.

    I think the greatest thing will be virtualized intel cpu's running multiple copies of OSX for servers. Or even Windows and OSX. Apple xserves will look very attractive now when can do anything, have apple quality hardware, and have true migration to any OS or software that you need. Brilliant move.
  • by somethinghollow (530478) on Thursday January 19, 2006 @01:30PM (#14510756) Homepage Journal
    According to some recent rumor mongering, the Intel supply chain faltered [tripod.com], which is ironic (situational irony [wikipedia.org], as best I can tell) since that was the very reason they chose Intel.
  • Cost difference (Score:2, Interesting)

    by neuromancer2701 (875843) on Thursday January 19, 2006 @01:41PM (#14510865) Homepage
    Think there was an article awhile back about what the average cost of an Intel processor compared to a PowerPC and How would Mac rationalized keeping the same price? I did a quick and keep in mind quick price comparison of a Macbook and a Dell. The Mac costs $2500 and the Dell about $2300. The Dell does not come configured like the mac so I had to do some tweeking to get the above prices. The only diffence that I can see in configuration is the Dell has a 7800go and 17" screen and the Mac has a 15.4" and a XT1600. The price for the hardware that you get was a lot closer than I thought(I thought that the difference would be greater) It just depends if you are a mac person or if not do you want to invest time and money into another Computer/OS. For the mass public, I can't see Babyboomers trying to learn a whole new OS, my Dad has a hard enough time as it is with windows.

    To each his own I guess
  • by EntropyEngine (890880) on Thursday January 19, 2006 @01:46PM (#14510911)
    It'll be interesting to see where the Xserve fits in when the big chip shuffle comes along.

    I wouldn't be surprised if the Xserve stays with the IBM G5 chip for the forceable future.

    While that might cause some confusion for some developers, not all developers write applications for servers...
  • Re:the real costs (Score:5, Interesting)

    by Jerry Smith (806480) on Thursday January 19, 2006 @01:46PM (#14510912) Homepage Journal
    porting operating system $30,000,000

    OS X derives from NextStep/OpenStep, and has been developed for n86 from day 1. They ported every release to PPC. Yes off course it needed aftercare, but still: first for n86, then to PPC.

  • Re:Pentium-M (Score:3, Interesting)

    by Kjella (173770) on Thursday January 19, 2006 @01:47PM (#14510927) Homepage
    Yes, the Pentium-M is an excellent piece of machinery.

    It's just too bad that the best Intel appears to be able todo is with what is, essentially, the rather old Pentium-3 design with a few added tweaks.

    Then again, as someone who holds stock in AMD but not INTC, I'm not exactly crying right now.


    Well, if that's what you believe. The Pentium M was simply outclassing the P3 and AMD solutions on release, and the Core Duo is not only dual-core (remember all the fans of SMP systems around here?) but is providing Athlon64 class performance with much lower power consumption. Laptops are *not* Intel's weak point. If that is your understanding of "a few added tweaks" then an Athlon64 X2 is just an old Athlon with a few tweaks like 64bit instructions and dual core *rolls eyes*. Desktop and server chips is where Intel is struggling. Until they manage to let go of the PIV line (which is 90% politics and 10% engineering) I think you're holding the right stock.
  • by miller701 (525024) on Thursday January 19, 2006 @01:51PM (#14510959)
    It seems to be costing them me as a client, since they dropped FW800,

    Didin't catch on like they'd hope FW400 still available

        s-vhs,

    I believe there's a mini-DVI to (mini) s-vhs adapter

        display resolution,

    Only 60 pixels, and you gain an iSight (which may or may not be of value to you)

        probably battery life

    We'll have to wait and see

        and anticipated dual-layer DVD-RW drive...

    a concession to the 1 inch thick styling, a bummer none the less.

  • Re:How about... (Score:2, Interesting)

    by SchrodingersRoot (943800) on Thursday January 19, 2006 @02:01PM (#14511080) Journal
    If it becomes trivial to pirate the OS, and a significant number of people do that instead of buying a mac

    While I suspect that piracy will occur, I'm not sure it would significantly impact their sales figures. As is, most people who purchase Macs are subjects of the Apple Effect (characterized by unwavering and (potentially unjustified?) fanaticism for all things Apple). Opening up OSX to the x86 architecture will no doubt sell OSX to some of those who don't want to be tied to proprietary hardware, but most piracy, I believe, will occur in situations where the user wouldn't've bought a Mac/OSX in any case. So while it may affect their bottom line, I don't see it being as big an issue as it is for MS.
  • by LWATCDR (28044) on Thursday January 19, 2006 @02:17PM (#14511236) Homepage Journal
    Okay I would bet big money that Intel is practically giving these CPUs to Apple to start with.
    1. Intel has lost a lot of luster. The Itanium and latest versions of the P4 have been real disappointments. In a strange turn around the Intel dual core chips are sell because the are cheaper than the AMD chips.
    2. Apple isn't using a lot of Intel CPUs right now. Intel can afford to give Apple a big break for the prestige. Think about it. If Apple wasn't using Intel how much good press would Intel be getting?
    3. AMD is selling off the chips it can make AND it does offer something that I don't think Intel can. A 64-bit notebook cpu. Apple porting OS/X to x86 sees odd when it could have used EMT64. The only reason I can come up with is Intel is practically giving Apple the Duo.
  • Re:How about... (Score:2, Interesting)

    by zos (249765) on Thursday January 19, 2006 @02:29PM (#14511359)
    I'll bite. First, If you thought average Mac users were evangelists, you should talk to Mac developers, because most of them would never go back to any other platform. Second, for your supposition to come to be, thousands of non-geeks would have to pirate the OS, which is not likely because there isn't a real benefit in pirating the OS. Why? For the same reason Macs don't have higher market share: it's the lack of applications. Last, every permutation of outcomes of the Apple Intel switch has been cataloged and written down for the record, therefore let's move on.
  • Re: I disagree (Score:2, Interesting)

    by dasil003 (907363) on Thursday January 19, 2006 @03:50PM (#14512287) Homepage
    That's a fair argument, but the advent of a computer in every home is relatively recent. As much as the industry wants to keep pushing the envelope, they have to deal with the fact that customers may not be impressed enough with future enhancements to keeping buying a new computer every 3 years.

    My personal experience is that owning a 5 year old G4 that was bottom-of-the-line at the time is still a viable computer. Not only can I use it for email and web surfing, but it also pulls its weight in Photoshop and web development. Every other time I owned a five year old computer it was depressingly obsolete.

    Anyway, I'm not saying you're wrong, but I do question how long hardware sales can drive the computer industry. At the very least, the market is too mature for the kind of growth it's seen over the past 20 years. Barring some next-generation kill app, of course.
  • by DECS (891519) on Thursday January 19, 2006 @04:52PM (#14512932) Homepage Journal
    ISupply has been getting a lot of press about their analysis of how much manufacturers pay for parts, but where is the evidence that suggests iSupply has any inside information?

    Their analysis on Apple's part costs for the Core Duo processor are simply, "we guessed Apple gets a 10% discount," but they offer no basis for that. Apple apparently negotiated a 50% volume discount over retail in Flash RAM from Samsung. iSupply gives no suggestion where they get their 10% figure, so for all we know, they just pulled it out of their ass.

    The sensationalism surrounding iSupply's reports (available in full for a fee) make it clear that, while iSupply is in the business of selling information, it has all the integrity of a tabloid like World Weekly News or the Enquirer.

    First they released sensationalist PR that suggested that Apple was making crazy money on the iPod Nano (now pay to read the whole report!), and now they release sensationalist PR that suggests that Apple is almost losing money on the Intel based iMac (now pay to read the whole report!). The truth is clearly not as extreme as their PR flacks spun it in either case.

    Of course, on its own, a simple guess on the total cost of parts doesn't sound very exciting. But even with a sensationalist headline, a simple guess on the total cost of parts isn't very valuable.

    Journalism in general has been coasting along for some time on the reputation of a former institution that earned credibility based on dutiful, responsible reporting standards and a self imposed ethic. Professional journalism is been replaced by cheaper PR editors (within newspapers charged with first making a profit rather than providing a public service) and independent bloggers who scribble whatever comes to mind without bothering to check facts (or assume their recollection of reality is the same as a report based on facts from attributed, verifiable sources).

    The lines between [opinion/conjecture] or [commercial/political messages] and [unbiased and objective journalism] are being blurred to the point where the general public doesn't seem to even remember that they are different things.

    iSupply is a good example of presenting your personal blog/business as if it were a credible news report.

    Until iSupply can provide some basis that suggests they have any real insight into secret pricing deals, their figures are worthless. So far, all they've released is guess work based on what appears to be poor assumptions.

  • Re:How about... (Score:1, Interesting)

    by Anonymous Coward on Thursday January 19, 2006 @05:50PM (#14513412)
    I don't think Apple concerns very much of the piracy. They still have not put draconian DRM or registration to install Mac OS X. In fact, I think piracy will help Mac OS X and Apple in the long run as long as there is a certain level of skill needed to do so. The more people skilled in computer love and use Mac OS X, the more likely it is to become widespread. Laypeople do ask geeks' opinions on what computer to buy. If they love OS X much, they'll recommend it. Now, the key, I think, is that laypeople should not be able to pirate it without hassling their geeky friends, so they'll have to buy Apple's hardware. IOW, Apple gets free advertising from mouth to mouth from the geeks.

    It reminds me of the early days of Windows. The more people pirated it, the more likely they upgraded to the next version of Windows as they didn't want to dump their investments in their computer skill, data and applications.
  • IBM's chips.... (Score:3, Interesting)

    by rdean400 (322321) on Thursday January 19, 2006 @07:00PM (#14514013)
    "IBM's chips are power hungry and generate a lot of heat, and are therefore not suitable for notebook computers."

    This is a selective interpretation of the truth. The portion of the Power family that is used in Apple products generates a lot of heat because it's based on older Power4 technology. IBM's processor roadmaps include smaller-footprint chips just like Intel's do.

    It is unlikely that Apple's move is simply about the roadmap due to power consumption. Power architecture is used in everything from cell phones to big honkin' servers. No, it's more likely that IBM's roadmap simple doesn't hit the same performance and power consumption points that Apple wants to hit.
  • Re:the real costs (Score:1, Interesting)

    by Anonymous Coward on Thursday January 19, 2006 @08:57PM (#14514820)
    Funny as this may be, I still own a 6-year old iBook that actually has no fan, had 10-hour battery life for the first 2 years, and yeah, still works great, and runs 10.3 usably fast, iTunes, MSOffice, Safari, and all. Oh yeah, an uptime of 24 days right now, and not even sure why I even restart it, unlike my work windows PC (I have not bought 10.4, there's simply no need for me to do so, but I am pretty sure it will run as well. Also, the battery just died at once, about two years ago)

    Frankly, I do not give a crap what processor a laptop has, but I am very impressed with one that is quiet, cold, and runs off batteries longer than a PDA.

    I believe the battery time will be a lot less with the new IBM switch...

    Before, when Apple said 6 hours, and it really meant 10. Right now they say 4 hours, and it probably means 2 while watching a DVD with wireless on...

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