More Apple/Intel

So, I was convinced that CNet was being played on the Apple moving to Intel CPUs rumor. Then I read Scoble’s take on the topic, and I’m not so sure anymore. He claims that he’s personally confirmed it with people he knows, and that Apple’s going to announce a big move to x86 on Monday. John Gruber seems to be in a similar boat–it doesn’t make any sense, but both the WSJ and CNet are reporting it as fact, not as rumor, and it’s really unlikely that they’re both wrong.

But really, given the information that we have, it just doesn’t make sense. Apple may not be happy with IBM’s ability to speed up the G5 and build a laptop model, but dumping the PPC and moving to x86 seems like gross overkill.

Gruber speculates that Apple and Intel may be working on their own PPC chip, but I can’t really believe that–even if Apple does have the legal right to do that, I can’t see Intel going down that road. It’s too much work for too little profit.

So, like Gruber, I have to conclude that we’re only seeing part of the picture. He doesn’t seem to have a good theory on what’s happening, but here’s mine: Apple has decided that:

  • Tiger is basically as good now as Longhorn will be in late 2006.
  • 10.5 will be better then Tiger.
  • Windows is more vulnerable now then ever before–the burden of viruses and spyware is a crushing load for small companies.
  • Migrating to Longhorn will be a fairly traumatic event for smaller companies.
  • Most users only really need a limited amount of software: email, web browser, Office.
  • A lot of users have a very positive impression of Apple, thanks to the iPod.
  • Most users would really like to have a less-complex, easier to maintain, more reliable alternative to Windows.

Given that, what if Apple has decided that it’s time to bet the house on killing Windows’s monopoly on the PC desktop? Through some combination of Apple-branded X86 hardware, OS X-for-x86 (probably just x86-64), and maybe a Windows emulation environment. With Intel’s soon-to-be-shipping virtualization technology, it wouldn’t be that hard for Apple to get Windows to run underneath “OS X86”.

So, basically Apple will present Windows users with an option–run our software, and you’ll get our wonderful OS, no viruses, no spyware, and the ability to still run Windows if you really need to and you’re willing to pay for the extra license.

If this is the plan, then I wouldn’t even be stunned by Apple selling OS X for non-Apple-branded hardware. There’d be fairly limited hardware support (probably just brand-new x86-64 chips and video cards that Apple already supports, at least for now), but that probably won’t matter all that much, because you’ll be able to get a decent PC with the right specs for under $1k, and the same hardware will be usable under Windows as well.

Apple-branded X86 hardware would then be marketed as better-integrated, better-designed, better-built, and better-supported. They’d remain the BMW of computers. Plus, it’d come with an OS X license, which would make it somewhat price-competitive with buying a Dell (with Windows) plus OS X. A similar strategy seems to work for Sony, and their systems are legendary for dying after a year or so; Apple could probably make it work. Their profit margins would be lower, but they’d save a lot of hardware R&D money–they could probably get out of the ASIC business, for instance. That would let them concentrate more resources on the software side of things. If they could capture 20+% of the market, their revenue and profits would be substantially better then they are now.

So, is all this really going to happen? I have no clue. It’s an interesting theory, and it makes at least as much sense as anything else that I’ve read so far. It’s hugely out of line with what Apple has spent the last decade doing, but it’s agressive, and the timing is right.

Frankly, I’d probably be more inclined to believe it if we hadn’t seem similar rumors for years. So what’s different now? Why is it a good idea now when it wasn’t before? Two reasons: the iPod and spyware. Users have seen what Apple can do, and they’re buying iPods in droves, and at the same time they’re cursing their Windows systems and their amazing ability to collect crap off the net and install it behind the user’s back. Both of these are relatively new occurances, and they both play in Apple’s favor.

So, we’ll see tomorrow.

Update: Om Malik seems to believe something similar.

Posted by Scott Laird Sun, 05 Jun 2005 15:02:32 GMT