Real Kato Blog: Apple Watch: "Yes, It's True"

So the rumors were right, and I was wrong. Apple announced today that it's switching to Intel x86 CPUs for its computer products.

First, let me apologize. I'm sorry to Dvorak and Thurrott and all the pundits that I thought were idiots, for predicting that Apple would switch to Intel processors. While I still believe that they were wrong on many details, and I still believe they spoke in sensationalist terms, they did get the essence of this story right, and they weathered the storm of criticism from Mac fans like me.

Anyway. Steve Jobs announced today that Apple would begin a transition to Intel x86-compatible CPUs for its desktop and laptop products, introducing its first Intel-based Mac in June 2006, and converting the entire lineup by June 2007. Apple has apparently been secretly preparing for this scenario ever since Mac OS X was introduced. The development team has been building every Mac OS X release and every application to run on Intel for the last five years. The widespread rumors about "Project Marklar" have been true.

It's likely that the primary reason for this announcement is that IBM is simply not committed to meeting Apple's needs when it comes to future desktop and laptop processors. Specifically, Apple needs high performance and low power consumption. IBM is headed in different directions: it has put a lot of priority in the game console market on one end, and in high-wattage Power CPUs for servers on the other end. Desktop and laptop CPUs will simply not be delivered in the manner that Apple wants. (IBM has already embarrassed Steve Jobs once by not providing 3 GHz CPUs on the promised timetable... Steve wouldn't let THAT happen again.)

There's a marketing rationale too, and that's the fact that processor performance will no longer be an issue when deciding between a Windows PC and a Mac. People will be able to make an apples-to-apples comparison (so to speak), and the Mac advantage will become clearer: more built-in features, a more stable and secure operating system, better applications, and more elegantly-designed products.

The decision is probably not about price. The difference in the price of IBM CPUs versus Intel CPUs is a small fraction of the overall cost of a computer, and Apple still has no intention of competing in the razor-thin-margin commodity computer market currently inhabited by the likes of Microtel, Dell, and Gateway.

Apple is doing their best to make the transition period painless over the next couple of years. There's an emulation mechanism to support PowerPC applications on Intel machines; the development tools can easily make applications that will run on both PowerPC and Intel; and, the transition announcement has been made plenty of time for developers to get on board.

However, this road is still fraught with peril. The primary problem? FUD (Fear, Uncertainty, and Doubt). Right now there are a lot of people saying, "Why should I buy a Mac now? The PowerPC is obsolete." Of course, a reasonable person would realize that any computer s/he purchases now will be obsolete in a couple of years. But the FUD is dangerous and pervasive, and the media just LOVES to sow seeds of doubt and confusion about Apple's future. How will Apple combat this over the next two years? Jobs has already said there'll be new PowerPC-based models coming out before the Intel boxes reach the market. Will they be sold at fire-sale prices? Will the features and performance be compelling enough to get people to buy, trusting Apple enough to support these machines for their entire lifecycle? It's hard to say. Apple will have to manage its PR very carefully... and it'll have to manage its developers, too, making sure that PowerPC is supported for a long, long time. I figure it'll be six to eight years before Apple can completely drop support for the PowerPC. That's an eternity in software development terms.

Another concern for Apple is that Mac OS X will find its way onto non-Apple PC boxes. Apple very much wants to avoid a repeat of the Clone Wars, where companies like PowerComputing were allowed to license Mac OS 7, and they promptly cannibalized the high-end Mac market with better-performing and lower-priced machines. Apple VP Phil Schiller has stated strongly that Mac OS X won't be allowed to run on non-Apple machines. That can be accomplished via a variety of legal and technical means: Apple will word its license so that usage on non-Apple boxes is not allowed, and then it'll put in various bits of software to try to enforce it. I have no doubt that hackers will find a way around the technical restrictions, but actually, Apple probably isn't concerned too much about that. Apple won't have to support the hacked machines, hackers wouldn't represent much in lost sales anyway, and having an enthusiastic underground community would actually help sales of adjunct products. So as long as no one finds a legal way to sell Mac OS X on a Dell, Apple should be all right, as long as it keeps its eyes open.

Apple hasn't ruled out the possibility that Windows will run on Intel-based Macs. And surely, someone will come out with a very good emulator to run Windows applications natively under Mac OS X (either with a virtualization system like VirtualPC, or via an API translator like WINE). The problem there is that software developers may lose the motivation to create Mac-specific applications. Apple would like to avoid the fate of Commodore, who abandoned their superior Amiga platform to become just another clone PC vendor. Commodore, of course, was horrendously mismanaged; let's hope Apple is not.

So you've got two slippery slopes to worry about. The first one is this:

- Mac OS X on Intel
-- Mac OS X on Generic PC boxes
--- Mac OS X as a task under Windows
---- Mac OS X apps running on Windows
----- Death of Mac OS X (Apple becomes an application software developer)

The second one is this:

- Mac OS X on Intel
-- Mac OS X running VirtualPC
--- Mac OS X running Windows applications natively
---- Mac OS X running only Windows applications
----- Death of Mac OS X (Apple becomes a PC hardware manufacturer)

Either scenario would be bad news. Apple will have to walk a very fine line here.

There are a couple of things important to Apple's success. One is the support of the developer community. We can be sure that the large developers like Adobe and Microsoft will get on board; but what about the thousands of smaller developers who have just managed to survive the OS X transition? Will they eat the cost of buying $999 Intel developer kits and doing the work to port to a new processor? Or will they just depend on the emulation system to carry their PowerPC applications forward? Neither scenario is particularly comforting. To port to Intel, there are a number of hairy issues, issues that Apple has documented in a hundred-page guidebook for developers. Emulation is also problematic, mainly because the emulation layer won't provide G4/G5 processor emulation; it'll only emulate the G3, without any vector processing. I think this will mainly be an issue when trying to play PowerPC-based games; the performance will suffer noticeably, potentially giving Apple a black eye when compared to Windows-based boxes.

In spite of all the potential problems, I think Apple just might be able to pull it off. It has two key assets: one, there's a HUGE cash reserve to help it through the next couple of years. Two, there's the iPod, which is independent from all this hubbub, and will continue to provide profit for Apple even if computer sales completely dry up.

An interesting side note about all this: the computer industry is really being shaken up, and there are a lot of strange bedfellows being introduced. Apple and Intel? Sony and IBM? IBM and Intel? Apple and Sony? Everyone's a partner, and everyone's a competitor.

The next couple of years should be very, very interesting.

As for me, I just don't know what to think. I have to admit that my faith is a little shaken, as I'm not quite as sure about my plans to buy new Macs over the next couple of years. Will I try to get by with my five-year-old laptop and my three-year-old desktop for a while longer? Maybe. And if I'm having second thoughts, then what about a person who hasn't thought this through rationally? Like I said, the biggest problem is FUD, and it's the same problem that Apple has had for a long time. Let's hope Steve Jobs has learned a few things by now.

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