Apple’s Chip Deals: Are Surprise Changes Coming?

With Apple and Steve Jobs, as always, there’s more going on than meets the eye. The king of ‘One More Thing...™’ is leading us to believe that the Mac’s switch to Intel chips is a simple switch. The Flash memory deals are just to secure chips for the future iPods. There’s more going on than just chip headlines. But what?

The answer, of course, is anybody’s guess, though recent news stories are starting to paint a picture. That picture of Apple’s future is substantially different than just new chips for Macs and new chips for iPods. Much different.

First, Apple wants us to believe, for now, that the switch from IBM’s highly touted and highly hot PowerPC chips is because Intel offers a better roadmap for the future, more power per watt, stable chip supplies, and, ostensibly, lower prices, which would lead to lower priced Macs which could increase market share.

That’s plausible and logical and probably accurate. As far as it goes. It goes much farther, especially as we see recent announcements by Intel regarding their present and future chips.

For example, Intel has launched the first of a series of processors, chips that support a nifty component called ’virtualization.’ VT will enable a processor, the heart of present and future Macs, to run multiple operating systems in independent partions, or containers-- all on the same chip.

Think of the possiblities. If you like Mac OS X’s ‘Fast User Switching’ where the cube effect (among others) moves effortlessly from one Mac user to another and keeps everything running, you’re going to love the future Macs.

The potential exists for future Macs, and not too distant future at that, to run OS X for Intel, and Linux, and Windows.

All at the same time. Instead of switching to a new user and watching the cool cube effect make the switch, a Windows partition would pop up, and the Mac would be running Windows.

I see that little light bulb above your head just went on with an audible ‘bling!’ Or, ‘ka thunk.’ See the possiblities?

Gone would be one of the major reasons many Windows users don’t switch to Mac OS X; “It doesn’t run Windows” or “I’d have to buy all new software” or “I need Windows for work.”

This would literally be the best of all possible worlds. How long would it take before former Windows users now bouncing back and forth between Windows and Mac OS X would stop bouncing and just stick with the Mac?

Obviously, there are a few caveats with this very plausible scenario. RAM requirements to run OS X, Windows Vista, and Linux-- simultaneously-- would be hefty. Microsoft wouldn’t be happy, either.

Also interesting is Apple’s recent patent application which “… describes a process whereby users would be able to load one of three operating systems as their primary OS and then load a secondary operating system as their secondary OS.”

Hmmmm. That patent actually goes on to describe a system and method for tamper-resistent code, which indicates Apple is serious about keeping OS X running only on Apple hardware. For now.

The Intel chip picture is becoming more clear. Apple wants low power, steady supply, low prices, innovative features (none of the Windows box makers or Microsoft ever ask such of Intel-- Apple will), and the ability to run anything on a Mac.

Second, Apple recently cut a big Flash memory deal with the likes of chip giant Samsung to ensure a steady supply and low price for iPod chips. That’s no surprise because nearly 40-percent of Apple’s revenue these days is iPod related.

There’s also that 60-percent to 80-percent iPod, iTunes Music Store market share to protect, so Apple cut some hard-nosed deals for chips. Big deal.

The big deal came even more recently when Apple announced a huge deal and stake with Intel and Micron over NAND flash chips. Intel wants such chips to be integrated into future computers.

NAND could allow a computer to become fully ‘instant on,’ so it doesn’t have to go through the steps of grabbing data from a hard disk, shoving it into RAM, blah, blah, blah.

Again, on the surface, that sounds like a simple deal for Apple to secure some new technology to implement into future Macs. Except…

Except for this. Macs are already pretty much ‘instant on.’ Close the lid on any PowerBook or iBook these days, wait 10 seconds or a week, then lift the lid. By the time the lid and screen is in the upright position ready for viewing, the Mac is back ‘on’ again.

No, Apple is not securing NAND chip supplies and investing $1.2-billion (with a $500-million advance payment) in the Intel-Micron deal for ‘instant on’ as we know it on Macs as we know them. There’s something else Apple wants.

All signs point to an ‘instant on’ for a future Mac that’s not like a Mac as we currently know them. Smaller. Much smaller. Wireless. Light. Instant on. Mostly screen. And plenty of NAND flash memory for applications.

Is this ‘future smaller wireless Mac’ the Newton reborn? Is it Apple’s real answer to the Windows Media Center? Is it the big piece still missing from Apple’s digital hub strategy (TV)? And when does Apple spring this secretive new child on the world?

The ‘when’ is probably easier than the ‘what.’ 2007 after Mac OS X Leopard and the move to Intel Macs is nearly complete, and Windows Vista is on the streets (or not; it won’t matter).

What we’ll see within a year is becoming more clear. The Mac will run Intel chips. Smaller, lighter, faster, instant on, ready to go anywhere and everywhere, and ready to run OS X, Windows, or even Linux.

The iPod will continue to get smaller and contain more functionality. The basic iPod now does music, photos, video, and video out. How much of a stretch is it to make the iPod become a mobile version of Skype, and a pocket sized internet telephony device with audio and video (not to mention music, Mac synchronization, etc.)?

As with any ambitious plan to grow a company with a profile like Apple’s, getting to a specific goal requires layers of success. We’ve seen Apple do this already over the past four or five years, as OS X was literally given to users a ‘layer’ at a time (new versions with improvements), iLife was exposed and matured a layer at a time.

The same will take place with future Macs, iPods, and Apple’s digital hub strategy. Layers. The next layers will be unveiled at Macworld in early January 2006. With new chips and surprises. What remains to be seen is whether the ‘missing link’ will be a Mac or another device that fits within the digital hub. Opinions?

Bambi Hambi
See what happens when you have too much time on your hands, Tera?

Jack D. Miller
Tera, it’s a plausible scenario, though I don’t see how we can extrapolate a future product from Apple’s deals for chips.

Alexis Kayhill
One thing is for certain, Apple wants more exposure and market share. Lower priced Macs, should they debut at Macworld in January, will be the first sign that Apple is serious about growing the platform.

Carol Mary Miller
Until the chip deal, Apple was sitting on about $8-billion in cash. I’m still waiting for some of the holes to fill in the digital hub for the Mac. Missing in action is anything to do with TV.

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