Apple and AMD: A match not meant to be

FOR A COMPANY that likes to "Think Different," Apple chose a conservative path in selecting Intel processors to power its latest generation of computers.

AMD has been a leader in getting 64-bit technology off the PowerPoint and into servers, desktops, and wherever else they can put it and has a clear-cut technology advantage over most of the current crop of Intel processors. Their efforts have paid off with the company capturing over 21 percent of all desktop and laptop CPUs worldwide in the fourth quarter of 2005. It's making a killing in the server arena with Opteron. Even Intel-diehard Dell may bring some AMD power into its lineup in the spring, if the analysts are to be believed.

The rumour mill says there are shortages of AMD mobile chips in Taiwan because Dell is lining up to buy them. If that's so, then such a shortage means that supplies are tight enough that Apple might not have been able to get AMD processors in the quantities they expect they'll need over the next twelve to eighteen months. Further, AMD is likely much happier milking the server market, where the margins are higher and working with HP and Sun is easier than trying to deal with the demands of Cupertino.

Instead, Apple chose Intel because it was - gasp - the safe choice. Intel was more than willing to sell them chips after all these years and it has more than enough capacity laying around to keep Apple in CPUs for a while. Besides, sales are down and if Dell and the rest of the world going to buy chips from AMD, it doesn't take a lot of effort to cut a streamlined deal with Apple. There's no doubt in my mind that some executives at Intel are happy at not having to worry about shipping metallic stickers to Apple's factories or writing matching-fund marketing checks every quarter. So there's a price to be paid in terms of Apple's advertising dig at Intel process, but that's nothing compared to the insults Intel has suffered with the rise of AMD in the server market.

Besides, Apple's adoption of Intel chips has resulted in one of the biggest PR shot in Intel's arm in a while. Sure, there was a lot of talk about CES about Viiv and DualCore and the like, but it was all ho-hum. MacWorld was the hottest commercial fix for Intel since they rolled out their little boing…boing-boing sound-theme.

Down the road, Apple could choose to incorporate AMD CPUs into their products, but it's likely not worth the hassle of hassle of maintaining two separate code bases to take advantage of all the whiz-bang features in both AMD and Intel chips. Yes, yes, I know Apple has managed to support totally different chip families at least twice in recent history (from the Motorola 68000 class to PowerPC and now PowerPC to Intel), but the objective has been to cleanly dump a lower performing technology for a much superior one. AMD purists will argue that's what would happen if Apple moves from Intel to their favorite, but the performance battle between Intel and AMD is likely to seesaw between the two companies over the next five years as it has over the last decade. µ

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