2006: The year in Apple

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It was clear as early as June 2005 what the biggest news for Apple would be in 2006—that was the month when Steve Jobs announced Apple was jettisoning the PowerPC chip for new processors supplied by Intel. And while the Intel transition obviously dominated Apple’s maneuverings this year, it wasn’t the only news to come out of Cupertino.

Intel (finally) inside

Apple used the spotlight of Macworld Expo in January to launch its Intel era, unveiling an updated iMac line and the new MacBook Pro laptops. Both of the new machines ran on Intel Core Duo chips, which promised better performance and less power-consumption. For the most part, the chips delivered, with the lone disappointment being the performance of apps that hadn’t been recompiled to run natively on Intel-based computers. Those programs needed Apple’s Rosetta emulation technology to run on Intel hardware, though particularly processor-intensive software suffered a performance hit. (Mac OS X 10.4.8, released in September, dramatically improved the performance of Rosetta apps, however.)

In short order, Apple’s entire line of desktops and laptops swapped out their PowerPC processors for Intel offerings. The Mac mini got its Intel makeover in February, followed by the May release of the MacBook, a consumer-level laptop that replaced the iBook and 12-inch PowerBook G4. Finally, at its August developers conference, Apple rolled out an Intel-based Xserve and the Mac Pro, a dual-core dual-processor successor to the Power Mac G5. A little more than a year after Steve Jobs first announced Apple’s plans to change its processor supplier, the Intel transition was complete.

What did the move to Intel processors mean for Apple? Besides the immediate performance benefits from the new chips, the switch to Intel also opened up new possibilities for the Mac platform. Consider the arrival of software that lets Mac users install and run other operating systems on their Intel-based hardware (including Apple’s own Boot Camp beta.) Suddenly, the Mac is seen as a viable option in settings that had always been Windows-only operations.

Core Duo: The sequel

After wrapping up its Intel transition, Apple didn’t wait long to keep advancing its hardware offerings. Intel took the wraps off its next-generation Core 2 Duo processors in July, and Apple immediately took advantage. It upgraded the iMac to the Core 2 Duo chip in September; the MacBook Pro and MacBook soon got updates of their own. The result? Performance gains of around 10 percent over their Core Duo predecessors in Macworld Lab tests, thanks to the better-performing Core 2 Duo chips and increased L2 cache.

OS X changes its spots

Since the April 2005 debut of Tiger, things had been fairly quiet on the OS X front. And that had been by design—as far back as 2004, Apple indicated it planned to slow down the pace of OS X development from the major-update-per-year cycle seen since the operating system’s 2001 debut.

While not much was happening publicly with OS X, there was plenty of activity going on behind the scenes. And we saw just how much in August when Apple previewed the next major version of OS X at its annual developers conference. Dubbed Leopard, OS X 10.5 features modified versions of Spotlight, iChat, Dashboard, and other existing features. Additions to the operating system include a built-in backup feature called Time Machine and Leopard’s Spaces virtual desktops capabilities.

We’ll learn more about OS X 10.5 as we get closer to the update’s spring 2007 release date. Look for Leopard to dominate the Mac universe in the coming year.

Taking stock

In what was otherwise a stellar financial year for the company, Apple’s practices came under scrutiny with a voluntary investigation into stock option grants given to senior executives. In June, Apple disclosed that it found problems with some of the stock option grants made between 1997 and 2001. While the three-month investigation found that Steve Jobs was aware that favorable stock grants had been given, the Apple CEO was absolved of any wrong-doing by the probe because he was not aware of the accounting implications. The probe resulted in former Chief Financial Officer Fred Anderson resigning from Apple’s Board of Directors.

Apple was sued by stockholders as a result of the stock-option scandal. The company also delayed filing required financial reports with the U.S. Securities and Exchange Commission and ultimately requested a hearing with the NASDAQ stock exchange Listing Qualifications Panel to address the issue. In a filing in mid-December Apple said that it was unable to meet the December 14 deadline for filing its annual report, raising the possibility that this issue could continue to dog Apple into 2007.

I’m going to Disneyland

Pixar has always had a loose affiliation with Apple—it’s Steve Jobs’ other company, after all. But the ties between Cupertino and Emeryville became a little more transparent this year, after Disney bought Pixar for $7.4 billion. The move not only gave Jobs a seat on Disney’s board of directors, but made him the single-largest individual shareholder of Disney stock.

Perhaps that’s why, when Apple Apple added movie downloads to the iTunes Store, Disney was the first Hollywood studio to sign on. The movie studio was rewarded for being first on iTunes with full-length features: it sold 125,000 digital movies in one week.

‘i’ on TV

Once you start offering digital movies for purchase, what’s the next logical step? According to Apple, it’s a set-top box that will stream movies, music, and other multimedia files from your computer to your TV. Code-named iTV, the $299 device has been positioned by Steve Jobs as “completing the package” of Apple’s multimedia offerings when it ships in 2007. Apple’s first order of business, though: coming up with a final name for the product.

Happy anniversaries

The past year saw Apple hit a pair of milestones. October marked the fifth-anniversary of the iPod—the musical player that has dramatically improved Apple’s fortunes since its 2001 debut. The more significant milestone came in April, however; that was when Apple celebrated its 30th anniversary as a company. Whether you work with a Mac or use it at home, there can be no doubt as to Apple’s impact in an industry that changes faster than most of us can keep up. From technology innovations to industrial design and its award-winning commercials, Apple has changed the way we think of computers and what they can do for us.

This story, "2006: The year in Apple" was originally published by PCWorld.

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