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BPO Journal

Monday, June 06, 2005

From Appblue to Apptel

Had a fun weekend in hot n humid Houston - wished my folks a safe trip back home and relaxed to the best of my ability. Hence, the reduced number of blogs this week.

A singular observation of note over the weekend - Apple's proposed announcement at the Worldwide Developers Conference in San Francisco of its plan to transition from IBM PowerPC processors to Intel's Pentium chips . Given Jobbs' mercurial reputation, I thought I'd wait until the formal announcement today. Yes, its official. In fact, Apple has been working on the move for the past five years, creating two versions of its Mac OS X operating system. To quote Jobbs, "Mac OS X has been leading a secret double life".

The transition marks a change in Apple's traditional niche strategy. The Wall Street Journal reports that the move, which could help Apple ensure that its Mac systems remain competitive in the mainstream market, may have been driven by business needs to: reduce prices, create powerful new Mac products that are even smaller and thinner than the the one-piece iMac and Mac mini (IBM's chips, partly because of the heat they give off, have held back Apple designs for some compact products), and meet public commitments for increasing the speed of its desktop and laptop lines (Macs lag behind PCs in clock speed). The journal also reports that the decision may be driven largely by the increasing significance of laptops, which have become an increasingly critical source of growth for Apple and the industry as a whole - "Apple has been repeatedly stymied in its attempts to create a laptop based on the G5 microprocessor by IBM, because of the excessive heat of the chip. Intel, on the other hand, has made chips for mobile devices one of its key focuses".

In addition to the architectural problems - Apple will have to recompile and redesign all Mac OS X applications, and support and maintain two code bases for its operating system, as well as entirely different families of hardware - the decision is likely to cause an outcry amongst vitriolic Mac users who believe the switch is equivalent to joining forces with the enemy. It would also be interesting to see if the move makes the Macs more vulnerable to viruses, reduced incidence of which was a point in their favor thus far.

The transition also highlights that no sourcing relationship is unshakable. Even partners in long-term, long-standing alliances are forced to evaluate partnership objectives as they evolve to adapt to turbulent market and user needs.

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