Language Selection

English French German Italian Portuguese Spanish

Apple's Deal With Intel Won't Rattle IBM

Filed under
Hardware

While Apple Computer Inc.'s new embrace of Intel Corp. microprocessors leaves IBM in the cold, the news really isn't bad for Big Blue, which may have found the Apple account more trouble than it was worth.

For one thing, IBM Corp. derived relatively little revenue from making its "Power" brand of chips for Apple's Macintosh computers, which own about 2 percent of the global market.

IBM's future chip plans are focused elsewhere - notably the next generation of video game consoles made by Microsoft Corp., Sony Corp, and Nintendo, Co. IBM's chips also power several kinds of IBM server computers, which account for a huge chunk of the company's hardware revenue.

Both kinds of machines require such high levels of performance that it becomes an expensive and challenging proposition to adapt their chips for personal computers, especially mobile devices that present stricter energy and cooling requirements.

So while winning Apple's business gives Intel some bragging rights, ceasing to make chips for Macs will let IBM focus on markets it believes can be much bigger.

"It's never a happy time when you lose a customer, no matter how large they are, but Apple's impact on the PC market is marginal at best these days," said Charles King, principal analyst at Pund-IT Research. "It will have more of a PR impact than a financial impact."

Added SG Cowen Co. analyst Steve Weber: "This move will likely have indiscernible impact."

IBM shares were down 67 cents, 0.9 percent, at $75.12 in afternoon trading on the New York Stock Exchange.

IBM declined to comment on Apple's announcement Monday other than to release a statement reiterating its chip strategy. "IBM is aggressively moving the Power architecture beyond the PC," the statement said.

While most computer companies long ago abandoned chip manufacturing to industry-standard suppliers such as Intel and Advanced Micro Devices Inc., IBM has stayed with it as part of a broader strategy to distinguish the company as an innovative, high-end tech provider. That desire to focus on top-tier markets motivated the recent spinoff of IBM's PC business to China's Lenovo Group Ltd.

With IBM's internal chip needs falling short of the company's manufacturing capacity - and demand from outside companies such as Apple only tepid - IBM's microelectronics division lost $252 million in 2003, the last year in which IBM released detailed figures. The segment grew at a paltry 0.6 percent in 2004, while IBM's overall sales jumped 8.3 percent to $96 billion.

But IBM's long-term microprocessing bet lies in a new breed of chips, code-named Cell, being developed with Sony and Toshiba Corp. Promising blazing speeds and the ability to carry out 10 sets of computing instructions at once, Cell is due to come out next year.

Hopes for Cell are so high that Sony, which plans to use Cell chips in the next generation of PlayStation game consoles, has invested $325 million in improvements to IBM's semiconductor plant in East Fishkill, N.Y.

IBM's production of chips for Apple accounted for only about 2 percent of Fishkill's capacity.

Associated Press

More in Tux Machines

Leftovers: OSS

  • Codesmith Students Garner National Praise for Open-Source Contributions
    Reactide is an Integrated Development Environment built for React, which intends to make React development easier for Software Engineers. The project has been widely praised, amassing over 6,000 stars on GitHub.
  • Airbnb’s new open source library lets you design with React and render to Sketch
    Today, Airbnb’s design team open sourced its internal library for writing React components that easily render directly to Sketch. Instead of trying to get Sketch to export to code, the Airbnb team spent its time on the opposite — putting the paintbrush in the hands of the engineer.
  • [Older] Telecoms copying cloud providers make beeline for open source, say analysts
    The supersonic growth of Amazon Web Services and other cloud providers in the past few years owes much to open-source communities that fed them cutting-edge tech free-of-charge. Now telecom is mimicking this strategy through involvement with the Linux Foundation, according to Scott Raynovich (@rayno) (pictured, right), guest host of theCUBE, SiliconANGLE Media’s mobile live streaming studio.
  • Get a Preview of Apache IoT Projects at Upcoming ApacheCon
    The countdown until ApacheCon North America has begun. The blockbuster event will be in Miami this year and runs May 16-18. The Apache community is made up of many niche communities and ApacheCon offers something for all of them. Here, Roman Shaposhnik, Director of Open Source, Pivotal Inc., who is heading the Apache IoT track at the ApacheCon conference, gave us a sneak peek of what the Apache Internet of Things community can look forward to at the event.
  • Free Webinar on Starting a Collaborative Open Source Project
  • Oracle draws curtains on OmniOS
    With its openly stated operational remit of ‘aggressive acquisitions’ (albeit positively aggressive), Oracle is (very) arguably a firm known for buying, swallowing, acquiring those companies it decides to consume.
  • Partners Healthcare, Persistent Systems to develop open-source platform
  • Libreboot Applies to Rejoin GNU
    Last week we reported that after reorganization, Libreboot was considering rejoining GNU and was seeking input from its community to determine the amount of support it had for such a move. From reading the comments posted both on our article on FOSS Force and on Libreboot’s website, it comes as no surprise that the project’s core members feel they have the necessary consesus to proceed. Last night, FOSS Force received an email — sent jointly to us and Phoronix — letting us know of the decision. Rather than repeat what’s already been written and said on the subject (for that, follow the first link above), we’re publishing a slightly edited version of the email, which will pretty much bring everyone up to date on the situation.

Security updates and no more patches from grsecurity (without a fee)

  • Security updates for Wednesday
  • GrSecurity Kernel Patches Will No Longer Be Free To The Public
    The GrSecurity initiative that hosts various out-of-tree patches to the mainline Linux kernel in order to enhance the security will no longer be available to non-paying users. GrSecurity has been around for the better part of two decades and going back to the 2.4 kernel days. In 2015 the stable GrSecurity patches became available to only commercial customers while the testing patches had still been public. That's now changing with all GrSecurity users needing to be customers.
  • Passing the Baton: FAQ
    This change is effective today, April 26th 2017. Public test patches have been removed from the download area. 4.9 was specifically chosen as the last public release as being the latest upstream LTS kernel will help ease the community transition.
  • grsecurity - Passing the Baton
    Anyone here use grsecurity and have any thoughts about this?

Microsoft-Connected Forrester and Black Duck Continue to Smear FOSS

More Coverage of Kali Linux 2017.1 Release

  • Kali Linux 2017.1 Security OS Brings Wireless Injection Attacks to 802.11 AC
    Offensive Security, the developers of the BackTrack-derived Kali Linux open-source, security-oriented operating system announced the availability of the Kali Linux 2017.1 rolling release. Since Kali Linux become a rolling distro, the importance of such updated images was never the same, but Kali Linux 2017.1 appears to be a major release of the ethical hacking distro, adding a bunch of exciting new features and improvements to the Debian-based operating system.
  • Kali Linux 2017.1 Released With New Features | Download ISO Files And Torrents Here
    Offensive Security has updated the Kali Linux images with new features and changes. Termed Kali Linux 2017.1, this release comes with support for wireless injection attacks to 802.11ac and Nvidia CUDA GPU. You can simply update your existing installation by running few commands if you don’t wish to download the updated images from Kali repos.