Apple's relationship with IBM as its supplier of G5 processors is under the microscope at Business Week today.
The title looks at recent news that delivery of G5 processors – particularly the 90nm PowerPC 970FX chips used in Xserve G5s hasn't been what Apple had hoped for, but despite this says: "Big Blue is the right partner for the job."
IBM produces Apple's chips at its Fishkill manufactory in New York, but is "struggling to produce chips in sufficient quantity and the upper half of Apple's hardware lineup is in limbo," the report states, contrasting Apple’s present fortune with the chip shortage that afflicted the company when it moved to Motorola's G4 processors in 2000.
These delays may cause Apple some loss of face, Business Week observes: "In a worst-case scenario, sales of Apple's top-of-the-line G5 Power Macs will continue to languish, as buyers hold out for the speedy new chips. The delays in G5 progress may also force Apple CEO Steve Jobs to eat some crow. He had sworn to have a 3GHz G5 desktop on the market this summer, something that looks increasingly unlikely."
The report adds that "some experts" see current production problems as a blip. Speaking during Apple's recent conference call with analysts, Apple CFO Fred Anderson promised IBM and Apple to be "working very, very hard" to resolve these issues.
Former editor-in-chief of the Microprocessor Report turned processor analyst Peter Glaskowsky told Business Week: "I'm reasonably confident IBM will solve these problems in the next several months."
Despite birthing pains, the future of the Apple/IBM relationship looks fair. The report looks at the emerging next-generation chip from IBM, the Power5. While Apple's current G5 is based on the Power4 processor, the Power5 is a likely candidate for the future road map of the processor design.
Power5 chips also allow for multithreading, which implies that at some future point, with the megahertz gap far behind Apple, a move to support on-chip multithreading could offer Apple performance gains in the region of 40 per cent – even at the same processor speeds.
Apple's choice of supplier remains a "safe bet", Business Week suggests: "Big Blue has sunk $2 billion into making Fishkill a showcase plant that's the backbone of IBM's Microelectronics Division".
And IBM is unlikely to allow this investment to fail.