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June 06, 2005

Weighing in NOW

I want to say these things now, so I'm on the record before the pundits weigh in.

I think Leander over at Cult of Mac nailed it: one of the big reasons Apple (Steve) is switching to Intel is to get hardware that will let him do the next ITMS - iTunes Movie Store.

I think Leander was also correct in saying that Transitive's binary translation technology is one of the huge roadblock removers for this to happen.

But what about the Osborne Effect? Who is going to want to buy a Mac G4/G5 now knowing that the entire platform will shift starting in 2006 and ending in 2007? More importantly, what about Apple's profits during that time?

Everyone will point to Apple's well-known 4 billion in reserves. But there's one other item that I want to mention: iPod.

The iPod division accounts for over 1/3 of Apple's profits right now. Right now - while iPod is still generating that kind of cash, is the best time for Apple to take it on the chin in their Macintosh division. iPod cash flow will help carry Apple during the coming lean times of Macintosh hardware sales.

So, why is Apple doing this?

• Years of frustration in getting reliable performance increases from G4/G5 architecture.
• An Intel technology that will allow Apple to take a stab at Hollywood.
• Intel processors that run cool enough for laptops (we've long heard of the cooling issues that have prevented a PowerBook G5).

What are the roadblock removers?

• Transitive's binary translation.
• 4 billion dollars in reserves.
• ongoing iPod profits to prop up a likely interim sag in Macintosh hardware sales.

Posted by jim at June 6, 2005 11:10 AM