Tuesday, June 07, 2005

Why Apple Switched

In addition to baseball and politics I also have a passion for technology and, specifically, Apple Computer. The big news out of Cupertino this week is that Apple has decided to move their hardware off of the PowerPC line of processors to the x86 processors found in just about all other consumer PCs. This is a huge symbolic shift, as Apple has long been viewed as an outsider in the PC market due in part to their choice of the PowerPC. Apple claims the change was neccesitated by a desire to continue to bring their customers the best possible computers. Analysts and observers point out that Intel should be able to provide Apple with a more steady supply of chips, at lower cost, than IBM could. There is also speculation that Apple is motivated by a desire to compete head-on with Windows or to sell movies (as they do music) by using the new Pentium D chip (which has built in copy protection and Hollywood's blessing).

Chances are all of these reasons influenced the decision, but I believe something else, something much bigger, is the real impetus: convergence.

The convergence of various forms of home entertainment and computing technology is happening - I regularly stream music purchased off of the internet to my stereo, watch movies, edit pictures, etc. all from my computer. However there are different views about what form convergence will ultimately take. Apple has now officially cast their lot with those who believe that convergence will occur around the home computer acting as digital hub.

This isn't really anything new - Apple has been saying this for a long time, as has Microsoft. However, I think most Apple fans and followers believed that Apple had something fundamentally different in mind than Microsoft's vision of a home entertainment PC: that Apple's digital hub ultimately wouldn't be a PC as we think of it today, but rather some sort of home entertainment component or appliance, and that Apple would morph into a consumer electronics company over the long term. With Steve Jobs appearing on stage at MacWorld alongside Kunitake Ando, president of Sony, a few months ago, it was reasonable to assume that there might be some grand collaboration in the works that would integrate Apple's hardware or software with Sony's TVs or Playstation. But the decision to move to Intel - whose chips are far more suited to personal computing, not multimedia applications - while Sony embraces the Cell processor (more on that in a moment) is a clear indication that this isn't going to happen.

By contrast IBM has clearly decided to go in the other direction with the new Cell chip. Here's what IBM is saying on their own webpage about the Cell chip:

- "Cell" architecture will allow all kinds of electronic devices (from consumer products to supercomputers) to work together, signaling a new era in Internet entertainment, communications and collaboration.

- Chips based on the Cell architecture will be able to use ultra high-speed broadband connectivity to interoperate with one another as one complete system, similar to the way neural cells interoperate over the brain's network.

- IBM expects Cell to define an entirely new way of operating...

- IBM...believes the one-size-fits-all model of the PC does not apply in the embedded space; embedded applications will require a flexible architecture, like Cell.

This is not a digital hub strategy. In fact, this is the opposite of the digital hub strategy. Apple either had to adjust their own strategy or leave IBM, and they chose the latter.

Meanwhile IBM has aligned with Sony and Toshiba and IBM processors will be in all of the next generation game consoles. These will be their big customers moving forward and they will dictate future chip designs as a result; if Apple didn't like it, there probably wasn't anything they could do about it other than go along for the ride.

Now we have the Xbox 360, Playstation 3 and Nintendo Revolution all using PowerPC and, in the case of Playstation 3, the Cell. They are all being released over the course of the next year, as is Toshiba's Cell-equipped TV. And so it begins - the alternative to the digital hub is about to hit the real world and if Apple is wrong, they lose.

And Microsoft watchers take note: Redmond has hedged their bet. They continue to push the digital hub strategy with products like Windows Media Center and Windows Media Player, but they also have the Xbox. No matter which vision prevails, Microsoft is positioned to come out a winner. Again.
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