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

Security Leftovers

  • Atom Installer
    One thing that I miss about using Ubuntu is PPA’s there are lot’s of PPA in Ubuntu and you can hack around and install all types of software which are required for your usage. In the Fedora side of the world there are copr repos but they don’t have as many repos as in Ubuntu and you can’t build non-free software (don’t get me wrong here, I love FREEdom software but couldn’t resist not using some beautiful non-free applications such as Sublime). I am creating a work around for this by using shell scripts which are open source (cc0) but when those scripts are executed they install non-free software on your system.
  • MKVToolNix 9.9.0 MKV Manipulation Tool Released with New GUI Improvements, More
    MKVToolNix developer Moritz Bunkus announced today, February 20, 2017, the release and general availability of MKVToolNix 9.9.0 "Pick Up" for all supported platforms, including GNU/Linux, macOS, and Microsoft Windows. MKVToolNix 9.9.0 represents a month of hard work, during which the developer managed to add a bunch of new and interesting features, fix as many bugs reported by users since last month's MKVToolNix 9.8.0 point release, as well as to improve the build system, especially in regards to the man pages of the software.
  • Chakra GNU/Linux Users Get KDE Plasma 5.9.2 and KDE Applications 16.12.2, More
    The developers behind the Chakra GNU/Linux operating system have announced today the immediate availability of all the latest KDE technologies released this month in the stable repositories of the distribution. Yes, we're talking about the KDE Plasma 5.9.2 desktop environment, KDE Applications 16.12.2 software suite, KDE Frameworks 5.31.0, and KDE Development Platform 4.14.29, all of which can be found in your Chakra GNU/Linux's repos if you want to run the newest KDE software.

today's howtos

Leftovers: Ubuntu

  • IOTA: IoT revolutionized with a Ledger
    Ever since the introduction of digital money, the world quickly came to realize how dire and expensive the consequences of centralized systems are. Not only are these systems incredibly expensive to maintain, they are also “single points of failures” which expose a large number of users to unexpected service interruptions, fraudulent activities and vulnerabilities that can be exploited by malicious hackers. Thanks to Blockchain, which was first introduced through Bitcoin in 2009, the clear benefits of a decentralized and “trustless” transactional settlement system became apparent. No longer should expensive trusted third parties be used for handling transactions, instead, the flow of money should be handled in a direct, Peer-to-Peer fashion. This concept of a Blockchain (or more broadly, a distributed ledger) has since then become a global phenomenon attracting billions of dollars in investments to further develop the concept.
  • Return Home and Unify: My Case for Unity 8
  • Can netbooks be cool again?
    Earlier this week, my colleague Chaim Gartenberg covered a laptop called the GPD Pocket, which is currently being funded on Indiegogo. As Chaim pointed out, the Pocket’s main advantage is its size — with a 7-inch screen, the thing is really, really small — and its price, a reasonable $399. But he didn’t mention that the Pocket is the resurrection of one of the most compelling, yet fatally flawed, computing trends of the ‘00s: the netbook. So after ten years, are netbooks finally cool again? That might be putting it too strongly, but I’m willing to hope.

Linux Devices

  • Compact, rugged module runs Linux or Android on Apollo Lake
    Ubiqcomm’s 95 x 95mm, Apollo Lake-based “COM-AL6C” COM offers 4K video along with multiple SATA, USB, GbE, and PCIe interfaces, plus -40 to 85°C operation. Ubiqconn Technology Inc. has announced a “COM-AL6C” COM Express Type 6 Compact form factor computer-on-module built around Intel’s Apollo Lake processors and designed to withstand the rigors of both fixed and mobile industrial applications. The module offers a choice among three Intel Apollo Lake processors: the quad-core Atom x5-E3930, quad-core x5-E3940, and dual-core x7-E3950, which are clocked at up to 2.0GHz burst and offer TDPs from 6.5 to 12 Watts.
  • Internet-enable your microcontroller projects for under $6 with ESP8266
    To get started with IoT (the Internet of Things), your device needs, well, an Internet connection. Base Arduino microcontrollers don't have Internet connectivity by default, so you either need to add Ethernet, Wi-Fi shields, or adapters to them, or buy an Arduino that has built-in Internet connectivity. In addition to complexity, both approaches add cost and consume the already-precious Arduino flash RAM for program space, which limits what you can do. Another approach is to use a Raspberry Pi or similar single-board computer that runs a full-blown operating system like Linux. The Raspberry Pi is a solid choice in many IoT use cases, but it is often overkill when all you really want to do is read a sensor and send the reading up to a server in the cloud. Not only does the Raspberry Pi potentially drive up the costs, complexity, and power consumption of your project, but it is running a full operating system that needs to be patched, and it has a much larger attack surface than a simple microcontroller. When it comes to IoT devices and security, simpler is better, so you can spend more time making and less time patching what you already made.
  • Blinkenlights!
  • Blinkenlights, part 2
  • Blinkenlights, part 3
  • [Older] Shmoocon 2017: The Ins And Outs Of Manufacturing And Selling Hardware
    Every day, we see people building things. Sometimes, useful things. Very rarely, this thing becomes a product, but even then we don’t hear much about the ins and outs of manufacturing a bunch of these things or the economics of actually selling them. This past weekend at Shmoocon, [Conor Patrick] gave the crowd the inside scoop on selling a few hundred two factor authentication tokens. What started as a hobby is now a legitimate business, thanks to good engineering and abusing Amazon’s distribution program.
  • 1.8 Billion Mobile Internet Users NEVER use a PC, 200 Million PC Internet Users never use a mobile phone. Understanding the 3.5 Billion Internet Total Audience
    As I am working to finish the 2017 Edition of the TomiAhonen Almanac (last days now) I always get into various updates of numbers, that remind me 'I gotta tell this story'.. For example the internet user numbers. We have the December count by the ITU for year 2016, that says the world has now 3.5 Billion internet users in total (up from 3.2 Billion at the end of year 2015). So its no 'drama' to know what is 'that' number. The number of current internet total users is yes, 3.5 Billion, almost half of the planet's total population (47%).