Apple does not believe that its pre-announced switch to Intel chips will dampen the halo effect of the iPod.

There has been much talk of the halo effect over the last year, with some analysts claiming that Apple has witnessed an increase in Mac sales on the back of the iPod's popularity. However, concern is now spreading that the companies move to Intel chips, expected to take place next year, will stop potential customers making the switch.

Jacob Asset Management analyst Darren Chervitz said: "Without the transition, it seemed like all the signs were pointing toward market share growth. I wonder if this was the best time for Apple to move to Intel chips."

Best line-up

But Apple is not concerned. The company told The Street that the company "currently offers the best line-up of Macs in its history, and plans to introduce more PowerPC-based Macs in the coming quarters. We think customers will continue to see the superior performance and value of Macs".

Will this "best-ever line-up of Macs" be enough to encourage people to buy new Macs prior to the Intel switch? Analysts are not convinced.

Gartner analyst Van Baker said: "The move to Intel-based computers could give consumers pause. A subset of PC purchasers always wants the latest and greatest devices and will avoid buying now if they know something better is just around the corner. Apple's transition could well dampen sales for Macintoshes until the new Intel-based ones come out."

"Any time anyone announces a new platform or a significant change, people are predisposed to wait and see," Baker added.

Corporation caution

IDC analyst Roger Kay also notes that corporations tend to be cautious about adopting new technology. "Companies often will wait to adopt a product until long after it is introduced, to observe others' experience with it and to make sure the bugs are worked out," he said.

BWS Financial surveyed corporate customers and found that a number have put large computer purchases on hold following Apple's announcement. BWS president Hamed Khorsand said: "I think this will prevent any halo effect from taking place now."

While corporate customers may put buying decisions on hold, general consumers, encouraged by the iPod, may still buy.

Tera Capital portfolio manager Duncan Stewart said: "Anyone who is dumb enough to buy a computer because of the iPod is going to buy in the face of [a processor] upgrade."

However, many analysts believe the move to Intel will be beneficial to Apple in the long term, regardless of the short-term consequences. With the PowerPC chips, Apple was continuously running into supply constraints, notes one buy-side analyst, who asked not to be named, reports The Street.

"For Apple to increase its market share, they needed to go to Intel," says the analyst.

"If Apple's halo shines brightly in the future because of the move, it may well dim in the near term," concludes the report.