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Monday, June 06, 2005
Apple to Switch to Intel chips

Apple Computer is expected to announce that it will begin using Intel chips in its Macintosh machines next year, ending a 14-year alliance with IBM and its processors, according to US media reports.

The move is a major change in strategy for Apple, according to The Wall Street Journal's online edition. The New York Times called it "an unprecedented gamble."

"This is a seismic shift in the world of personal computing and consumer electronics," Richard Doherty, president of a computer and consumer electronics industry consulting firm, told the Times.

"It is bound to rock the industry, but it will also be a phenomenal engineering challenge for Apple," he said.

Apple CEO and co-founder Steve Jobs is set to announce the switch Monday at Apple's annual developer's conference in San Francisco, the reports said.

The change could cause disruptions for Macintosh users as software developers scramble to make Apple programs run on Intel chips.

But it is a high-profile win for Intel, which is trying to adjust after the erosion of its long-term partnership with Microsoft, the papers said.

"For IBM, the end of the Apple partnership means the loss of a prestigious customer, but not one that is any longer very important to IBM's sales or profits," according to The New York Times.

IBM has long since expanded beyond the personal computer market. It makes chips for Sony and Nintendo's video game machines as well as specialized processors for Internet routers and for cell phone technology.

Microsoft dealt Intel a blow last year when it said it would use an IBM processor in its next generation video game console, the Xbox 360, due to hit stores later this year.

"It is likely that Intel forged the alliance with Apple in an effort to counter the powerful home entertainment and game systems coming from Microsoft and Sony," the Times said.

Apple for its part had tried to counter the Microsoft-Intel partnership when it forged the alliance in 1991 with IBM and Motorola.

Today, IBM supplies about half of the microprocessors used by Apple, and Freescale Semiconductor, a spinoff of Motorola, supplies the rest.

But in recent times Apple has been alarmed by IBM's failure to update its Power PC chip, the Times said, citing analysts.

The industry should know later Monday as Jobs takes to the stage of the Moscone Convention Center and delivers his speech.

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