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June 9, 2005
Apple's move to Intel affects Freescale and maybe NPUs
As with most of the industry, I was quite surprised to hear that Apple was going to dump Power PC and move to Intel. It must have been a hard thing for their ego to swallow, but in the end the superior economics of the X86 platform were just too compelling. Apple is more clearly turning into an OS company now. Out with the proprietary hardware. Apple OSX is basically Unix with a better UI. So would you buy Windows or Apple on an Intel platform? Hummm.
An interesting thing to note is what the loss of Apple as the last major customer of the Power PC platform will do to further investments on that chip line. It can't be good. Here is Linley's take.
===Apple Decision Impacts Freescale, IBM
-------------------------------------------
Apple's decision this week to move its Macintosh computers from PowerPC to
x86 in 2006 will impact Freescale and IBM to a modest extent, but it will not do significant harm to their embedded-processor strategies. We estimate Freescale's revenue from Apple was about $150 million in 2004, but the impact goes beyond this revenue; without Apple as a customer, the company is unlikely to continue developing new products in its MPC744x line of standalone processors. We believe this product line generates another $50 million or more in annual revenue from customers other than Apple.
Fortunately, Freescale no longer uses the CPUs from its 744x line in its most of its popular PowerQuicc products. The e600 (G4) CPU from the 744x dissipates too much power for most embedded applications, so Freescale developed the e500, which delivers slightly less performance but uses much less power, for PowerQuicc. Without Apples funding, we expect Freescale to focus on processors that provide a balance between performance and power dissipation rather than very high-performance products. We also expect Freescale to redirect development of the e700, a 64-bit PowerPC CPU intended to compete with IBMs G5 CPU, to better meet the demands of the embedded market, which is likely to further delay the project.
With Freescale unable to deliver a G5-class product in 2005, Apple has been forced to rely on IBM, but that company has become less and less interested in developing standard products. Over the past two years, IBM has sold its network processor, switch fabric, TCAM, and integrated PowerPC products, leaving only the standalone processors that it sells to Apple and a few others. But apparently even the estimated $250 million that IBM received from Apple in 2004 was not enough to keep Big Blue's attention. Apple's decision should allow IBM to drop the final vestiges of its standard-product business, letting it focus entirely on video-game manufacturers and its other large ASIC customers. By the way, anyone who believes IBM will be selling Cell processors to hundreds of customers in a few years just isn't paying attention. --LG
Posted by Martin at June 9, 2005 1:54 PM
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