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Apple’s decision to move to Intel has its risks. Processor transitions are not simple, in large part because they require software migration. But Apple has proven that that’s a problem it can handle. In the early 1990s, it brought its software from the 68000 to the PowerPC, and in 2001, it moved to OS X, a revamped operating system. The biggest risk of the switch to Intel, in fact, has nothing to do with what Apple can do, but rather with what it can prevent others from doing. “Every hacker in the world will try to make the Mac OS run on [PCs],” says Roger Kay, an analyst at International Data Corporation. “If it happened, it would tank their business.” Still, Kay notes that there are ways to prevent the Mac OS from being hacked. Apple is certain to pursue them.


According to Jobs, the first Macs that use Intel processors won’t be available until June 2006, so there’s also the risk of the Osborne Effect–the name applied (perhaps unfairly, given the history of 1980s PC maker Osborne) to the phenomenon of a premature new-product announcement hurting sales of existing products. But Apple has more than $2 billion in cash on hand and a cash cow in the iPod: it can probably weather any short-term losses.

In moving to Intel, Apple is betting that it can improve its fortunes by buying chips from a company that is sure to be focused on PCs for the foreseeable future. IBM, for its part, is moving from the business of hardware to the business of services (see “Research in Development,” May 2005). It could well be that all the major companies involved–Apple, IBM, and Intel–will be better for the move.  – By Michael Fitzgerald

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