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Apple, analysts talk Intel

Apple Computer CEO Steve Jobs confirmed on Monday one of the most talked about rumors in recent memory: Apple’s transition to Intel processors and away from its PowerPC-based chips. Analysts differ on their opinions of whether this move will ultimately be good for the company and its customers.

“We are all about building the world’s best personal computers,” David Moody, Apple’s vice president of worldwide Mac product marketing, told MacCentral in an interview following the keynote. “As we look at the roadmap, this is what allows us to continue to do that.”

The transition

Jobs took that message even further during his keynote as he addressed the PowerPC and Intel roadmaps.

“We can envision some great products we want to build for you, but we can’t see doing that with the PowerPC roadmap.” said Jobs.

Jobs also said during his keynote address that this is not a transition that will happen immediately. In fact, Apple is planning on a two-year transition period. However, the company is ready to go with Mac OS X as Jobs revealed that he was running his on-stage computer on an Intel processor.

“Every release of OS X has been compiled for PowerPC and Intel … just in case,” said Jobs.

Rosetta emulation

Jupiter Research analyst Michael Gartenberg admitted his reservations when he first heard the rumors of an Apple switch to Intel, but feels that Apple has done a good job on what he considers to be a key issue for the transition.

“My initial reaction when the rumors started coming out was that this would be a difficult thing, but I don’t think this is going to be as hard as some people think it might be,” said Gartenberg. “The key is how well they do the emulation of the older applications and it looks like they’ve done a really seamless job.”

Apple introduced Rosetta, a technology that will translate PowerPC-based applications to the new platform – a process that is immediate and transparent to the user. Each time the application is run, Rosetta will translate the code – while this is not as fast as recompiling the code to run on the new Intel processor, Jobs characterized it as being “Fast (enough).”

Apple undermining its message?

Not all analysts are happy with Apple’s move, feeling the transition compromises the market position they’ve held for many years.

“Apple has seriously undermined years of credibility by announcing the adoption of Intel processors,” said Technology Business Research analyst, Tim Deal. “The company has long touted the architectural advantages of the Power PC processor over that of Intel, particularly when running the kind of graphic-intensive applications the customers in its key vertical markets run. Now, Apple will need to prove itself again as it abandons one of its significant points of differentiation.”

Apple says it doesn’t reflect badly on the systems they are selling now -- it comes down to what products the company will be able to provide customers in the future.

“Today we have very fast systems,” said Apple’s Moody. “They have superior value and performance – what we are doing with this move is making sure we have that in the future as well. We are very happy with the Intel roadmap.”

Apple also confirmed that they would not stop customers from running Windows on the Intel-based Mac, although the Mac OS will not run on another PC.

“We will not sell or support Windows, but we are not doing anything in the hardware that would preclude someone from using it,” said Moody.

Overall Tim Deal sees this as a fundamental shift in the way Apple has done business over the years.

“This signals Apple's move away from being a popular counterculture icon to a mass-market computer vendor,” said Deal. “‘Think Different’ has become ‘Think Market Share.’”

Why buy a Mac now?

With the knowledge that a Mac you buy today will not even be running on the same architecture in a year or two, why would you make such an investment?

“Customers love our products and we are doing great things with our products right now,” said Moody. “There is no reason to suggest they won’t continue to be happy.”

Given the timeframe and the fact that Macs typically stay around for many years after the owner buys a new machine, Jupiter’s Gartenberg doesn’t see the current Macs slowing down.

“In this industry everyone knows that if you wait long enough you’re always going to get something bigger, better, faster and cheaper,” said Gartenberg. “The investment here is really in the software and the software is going to come along with you. Given the lifespan of a computer – 18 to 24 months – that’s not a big inhibitor.”

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