When is a chip not just a chip? When Apple is involved.

Apple's decision to put Intel processors in Macs starting next year provoked a wide range of strong emotions on Monday from software developers, industry analysts, and the company's famously opinionated user base, with one analyst at Prudential Equity Group saying: "By switching to a more mass-market processor, Apple likely risks diluting its value proposition as it has less control over the product roadmap. Apple also likely risks alienating its core loyalist base."

Alternatively the move could help Apple grow its market. "It will cushion a lot of the barriers about switching to the Mac," tech team lead for desktops at NASA James Richardson told Cnet.

For the most part, Apple's network of developers were willing to give CEO Steve Jobs the benefit of the doubt when it came to the decision to move away from IBM and Freescales PowerPC chips. But analysts were sceptical about the short-term effect on Apple's PC business during the next 12 months.

Apple did not specify which Intel chips it plans to use in Macs starting next year, but an Intel spokesman confirmed the chips will use the x86 architecture. Apple demonstrated Mac OS X running on a 3.6GHz Pentium 4 processor during Jobs' keynote at the Moscone Convention Center Monday.

Envisioneering Group president Richard Doherty believes that Apple has a lot of work to do to impliment this change. He told New York Times: “This is a seismic shift in the world of personal computing and consumer electronics. It is bound to rock the industry, but it will also be a phenomenal engineering challenge for Apple,” reports Macsimon News.


It will also require Apple software developers to make new versions of their products for the x86 architecture. This level of complexity will depend on how current developers have stayed with Apple's IDE (integrated development environment) and API (application programming interface) releases, Jobs said.

But developers did not openly revolt at the prospect, with many believing that this transition will be much easier than either of the previous tectonic shifts in Apple's history, from Mac OS 9 to Mac OS X and from the 680x0 chips to the PowerPC chips.

The ability to have one CPU (central processing unit) architecture across an entire environment was a big selling point for Nick Savvides, a developer with The University of Melbourne's School of Physics in Victoria, Australia. The School of Physics uses mostly Linux in its research environment, but has been slowly introducing Macintosh systems in that environment as it replaces older Windows-based machines, he said.

Savvides will now be able to replace his x86 Windows-based PCs with x86 Mac OS-based machines, which will still require some work but allow him to stay within the comfort environment of an instruction set he is already familiar with, he said in an interview following Jobs' keynote. And the fact that Mac OS X is ready to go on x86 helps a great deal, he said.

Future price considerations

For Peter Zinsa of the Kentfield School District in Kentfield, California, the move to Intel will hopefully produce lower prices for Apple hardware. "I pay extra for Apple's hardware because it's easier to maintain," he said, citing better protection from viruses with Mac OS. But working in the public sector means that every dollar is scrutinized, and if Apple could provide him with products that are cheaper it would make the budget process easier, he said.

Some analysts agree that Intel chips could cut prices. Banc of America Securities analyst Keith Bachman told Cnet: "Apple might be able to shave +/- $100 from the cost of a system. A lower price point to the consumer would be a positive for Apple. The move to Intel chips could help Apple boost the performance and battery life of its laptop computers." However, most analysts said it was too early to tell whether Apple's deal with Intel will result in lower prices for Macs.

Similarly, Prudential Equity Group told Forbes: "Intel chips could allow Apple to price more competitively on its Mac line, but we do not believe Apple's price premium has been a major impediment for the company, especially given the recent introduction of Mac mini."

Lower prices may put Apple in direct competiton with the Windows-based PC market, generally concidered to be less expensive. Near-Time's Samuel Watters told Cnet: "I would love to see the competition heat up. Apple will be directly priced to compete with Microsoft."

More chips

It's unclear whether Apple is jumping fully on board with Intel's "platform" strategy of providing the processor, chipset, and other assorted technologies to the PC vendor, or if Apple would maintain a degree of control over its own chipset and motherboard designs, said Kevin Krewell, editor in chief of the Microprocessor Report. Intel's chip prices are pretty similar to IBM's, but Intel could help Apple lower the overall system development cost if it took on some of the chipset development work, he said.

One thing is clear: "Intel may also provide Apple with a more consistent supply than IBM did and help Apple attract a larger base of software developers," Piper Jaffray analyst Gene Munster told Cnet.

Painless transition

Despite Jobs' confidence about the ease of the transition, it's inevitable that some developers will have a painful time making this transition, Krewell said. The company appeared to have a solid plan for easing developers from PowerPC to x86, but it will be difficult to support a user base on two different instruction sets in the future, he said.

"We expect the transition to be eased by Apple's gradual and phased shift, and note that it announced the early availability of Developer's Transition Kit to help. Our estimates are unchanged, and we continue to view Apple, trading above peers on ratios of enterprise value to sales, and p-e, as fairly valued for strong cash position, product design success," said Standard & Poor's analyst Megan Graham-Hackett in a research note, posted at Business Week.

Sales impact predicted

In the end, it appears Apple felt it had to leave PowerPC to look after the long-term health of its PC business, because that business might take a hit over the next 12 months, said Nathan Brookwood, principal analyst with Insight 64 in Saratoga, California.

"Once they get through this transition, they should be able to maintain a competitive posture with regards to [x86-based PCs]," Brookwood said. "But can you spell lame duck?"

"I would anticipate that anybody who was thinking about buying an Apple system between now and the end of 2006, they'll probably think and say 'Maybe I should wait and see how this x86 stuff shakes out,'" Brookwood said. Krewell agreed, "Why would I buy software today that is going to run in emulation mode in the future?"

Positive posters for Mac plans

However, most posters on Slashdot, the virtual pub of the IT community, seemed to accept Jobs' argument that a switch was necessary to stay relevant and competitive within the PC market. Over 1,000 comments about Apple's embrace of Intel were posted on Slashdot within a few hours of Jobs' announcement, following the thousands of other comments made as reports swirled over the weekend about the pending switch.

Some Apple purists will turn their noses up at Intel systems, but most Mac users don't care about the underlying technology, according to Slashdot poster "adamjaskie."

"As long as it runs OS X and Photoshop, looks pretty sitting on their desk, and Steve Jobs said "Hey, you know, this is pretty good!" they are sold," adamjaskie wrote Monday afternoon.

Some posters couldn't avoid finding the humour in Monday's announcement.

"I felt something, a disturbance in the network, as if a million Mac zealots cried out in horror and were suddenly silenced," wrote poster "m50d," an allusion to a quote from the Star Wars movie series.

Additional reporting by Karen Haslam