D-Day – Apple-IBM Axis Collapses

Well, I figured it was happening finally. The hint was there *if* you knew where to look. Looks like nobody else twigged to the firing of those Linux developers at Intel for timing – even though I had a thoughtful discussion with an analyst just last week over that very issue and asked whether that meant Jobs was going to Intel. He said “No way” but this time I wasn’t sure he was right – he went back to check things out one more time, was guaranteed it wouldn’t happen, and then “Voila”, it did. But his mistake was talking to Apple contacts. I didn’t bother. I looked at what Intel was doing. Since I’ve dealt with Intel on the silicon side over the years with SiliconTCP, it didn’t take a lot of digging to put the pieces together.

Markoff and Lohr (NYTimes) have one of the best articles on the topic today – less hand wringing and more substance than most. But they could add one more line that would tie it up, something like:
“The real story is Apple vs. Dell. High cost factor for Dell is Windows. Mac still sells at a premium above Wintel, and the OS & developer base is open source, so Jobs is out of the Mac developer debacle and cost leveraged. And he still has Microsoft Apps like Office in the stable … for now.”

Apple may be having the hissy fit, but IBM doesn’t care. IBM doesn’t even need Apple anymore to showcase their chips given all the game console manufacturers who are using them. Apple has always been high maintenance and low volume – the worse of all sins to a processor vendor – but IBM tolerated them because of their “Hollywood” artist image. But now it turns out gaming is even more “mogul” than Macs. Who wins? Intel for one, who’s been desperate to get some Hollywood patina for years, enterprise systems and desktops being so boring.

Customers and vendors will also win – in the short run. Prices will drop and applications development should broaden, especially in leveraging open source development for the X86 more effectively. But the long run remains bleak for Apple’s desktop and laptop division. It was the only decision possible for Apple if IBM wouldn’t give them the price breaks they needed for margin. But it probably wasn’t the best decision.

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