Analysis: Apple eyes the Pentium M; IBM looks to game consoles

IDG News Service - A processor alliance between Intel Corp. and Apple Computer Inc. would have seemed unthinkable five years ago, when Apple CEO Steve Jobs first began setting up the company's "just in case" plan for moving to Intel chips if its relationship with IBM and Freescale Semiconductor Inc. faltered. With IBM and Freescale moving in different directions from Apple, the backup plan moved front and center this week (see story).
Jobs ended days of speculation during a speech at the company's Worldwide Developer 2005 conference in San Francisco on Monday, confirming that Apple will use Intel processors in its Macintosh computers starting next year. This will require software developers to port their applications away from IBM and Freescale's PowerPC architecture to Intel's x86 architecture, a significant undertaking for some.
The first Apple systems in 2006 will use Intel's Pentium M processor, according to sources familiar with the companies' plans. The Pentium M uses the same x86 architecture as the Pentium 4 but consumes far less power. Its design philosophy is expected to be the model for Intel's future processors.
Apple officials did not return repeated calls for comment, and an Intel spokesman declined to comment on Apple's product decisions.
Jobs justified the move away from the PowerPC to Intel's x86 architecture largely on Intel's ability to deliver a high-performance per-watt ratio compared with IBM's future chips. This would tend to favor the Pentium M, which is just as powerful as high-end Pentium 4 processors yet uses far less power, Intel executives have said.
Industry analysts agreed that the Pentium M product Intel plans to launch in early 2006, the dual-core Yonah processor, could be an industry leader in performance per watt at that point.
IBM's PowerPC 970FX chip, which Apple called the G5, simply doesn't lend itself to PC designs that require low power consumption, such as notebooks and small form-factor desktops, Jobs said. Apple was also frustrated by IBM's inability to supply it with sufficient processors last year as the chip maker struggled with yield problems while getting its new manufacturing facility in East Fishkill, N.Y., up and running.
But Apple accounted for only about 2% of IBM's chip wafer production in East Fishkill, according to industry sources, and IBM is moving away from making chips for the PC market in favor of gaming consoles and high-end servers. An IBM spokesman declined to comment on the nature of his company's relationship with Apple, but the company released a statement indicating that it probably won't miss Apple's business.
"IBM is aggressively moving