Article on Apple's future at DVinfo.net

Boyd Ostroff · May 25th, 2003, 12:19 PM

The May 26 issue of BARRON's has an interesting article on page 14 about Apple. In spite of the listing on the cover that proclaims "False Note: iTunes won't save Apple", the actual article is entitled "Beyond iTunes: Investors applaud the new music venture, but Apple must address core weaknesses". I found the piece pretty thoughtful and well balanced.

The first part of the article focuses on Apple's big run up since opening the iTunes store, and questions whether it can be sustained. They note that AAPL closed at 13.86 on April 28, and finished last week at about $18, a 32% increase. But the author points out that Apple's $4.5 billion in the bank actually counts for $11.55/share. So if you look at the run-up in this light it's way beyond 32%; on April 28 the non-cash portion of the stock was valued at $1.80 but today it's risen to $7.00 which would be a 289% increase. They then go on to question whether this is a realistic valuation.

But aside from these market value issues, there was some speculation and discussion of whether Apple would make a shift to Intel/AMD processors. They quote analyst Andy Neff as saying that OSX has set the stage for such a shift, which he believes will occur sometime around the end of the year, allowing faster processors at lower prices. He further believes Apple may begin licensing OSX for Intel.

They also quote analyst Rob Enderle as saying Apple has already engaged in talks with Intel "It's a big problem: they are on non-competitive technology. With PowerPC, they don't have the economics of scale that Intel has. And they don't have Intel's co-op advertising dollars. So they can't maintain market share. Some people think they already have made the decision to switch."

On a somewhat related topic, has anyone else noticed those "articles" in the past few issues of DV magazine entitled "Mac Afficionado turned PC enthusiast"? Up at the top of the page it says "special advertising section". The write up focuses on Stu Maschwitz, co-founder of The Orphanage, and says how he's switched to the PC and became much more productive. The strange thing is that nowhere on the page does it say who sponsored this "special advertising section". Presumably it's Intel or Dell, as there's some really tiny print at the bottom of the page identifying their trademarks.

Jeff Donald · May 25th, 2003, 03:44 PM

The Intel switch pops up every so often. I think they would if the IBM 970 wasn't available. Supposedly, they even had AMD powered Macs running at their HQ with OS X. This project was rumored to have been abandoned earlier this year. The current thought is if Apple started producing AMD or Intel units the move would be on by investors to split the company in two. Hardware and software companies would be the result. Each could focus on the core business. I don't see this happening with Steve Jobs at the helm. But the stock needs to move up to keep investors at bay.

Boyd Ostroff · May 25th, 2003, 03:47 PM

<<<-- Originally posted by Jeff Donald :The current thought is if Apple started producing AMD or Intel units the move would be on by investors to split the company in two. -->>>

This was also discussed in the Barrons article...

Alex Knappenberger · May 25th, 2003, 03:52 PM

So what is the actual point? I think that if they started using AMD, or even Intel (it would be nice if it was AMD, though) processors, then many more people wouldn't be such "apple haters"...

Frank Granovski · May 25th, 2003, 04:03 PM

There's a lot of talk among Apple geeks that there will be a switch to AMD. Don't know if this is true or not (the switch). If Apple does switch, Apples will have to come with noisier fans. My friend's AMD "puter sounds like a vacuum cleaner. :)

Alex Knappenberger · May 25th, 2003, 04:09 PM

Just a vacuum cleaner? Mine sounds like a jet. 6 92MM fans, 6 80mm fans...over 600CFM...

Anyway, I think that would be cool if they switch to AMD processors, they would still run their OS, though, right?

Jeff Donald · May 25th, 2003, 04:20 PM

It would be a port of the OS to Unix. OS X is Unix based, so it wouldn't be extremely difficult to port over.

Jeff Price · May 27th, 2003, 09:45 AM

Since the latest MacBidouille rumors have the 970 powermacs sitting in warehouses ready to ship on June 23 and the 980 and 990 chips already being developed it doesn't seem real likely for there to be an immediate shift to AMD or Intel.

Nigel Moore · May 27th, 2003, 12:18 PM

Quote:

AMD, or even Intel (it would be nice if it was AMD, though)

Why? AMD run hotter and noisier. My boxes are Intel. OK, so I don't love myself for it! :-)

Quote:

It would be a port of the OS to Unix. OS X is Unix based, so it wouldn't be extremely difficult to port over.

True, to a point. But, presumably, there would have to be some abstraction layer between the OS, which was written for a different processor architecture, and the hardware. Or, the OS would have to be ported to native Intel/AMD code, and for there to be some translation layer between the OS and 'legacy' OSX software. Either way, there would be a performance hit.

Jeff Donald · May 27th, 2003, 03:04 PM

If a port was done, "Legacy" software would run with emulation. This is how PC software runs on Mac now.

I really doubt this will happen. All indications are that they will use the IBM 970 chip. A recent Business Week article all but confirmed Apple using the chip.

May 25th, 2003, 12:19 PM	#1
Boyd Ostroff Wrangler Join Date: Dec 2002 Location: Mays Landing, NJ Posts: 11,801	Article on Apple's future The May 26 issue of BARRON's has an interesting article on page 14 about Apple. In spite of the listing on the cover that proclaims "False Note: iTunes won't save Apple", the actual article is entitled "Beyond iTunes: Investors applaud the new music venture, but Apple must address core weaknesses". I found the piece pretty thoughtful and well balanced. The first part of the article focuses on Apple's big run up since opening the iTunes store, and questions whether it can be sustained. They note that AAPL closed at 13.86 on April 28, and finished last week at about $18, a 32% increase. But the author points out that Apple's $4.5 billion in the bank actually counts for $11.55/share. So if you look at the run-up in this light it's way beyond 32%; on April 28 the non-cash portion of the stock was valued at $1.80 but today it's risen to $7.00 which would be a 289% increase. They then go on to question whether this is a realistic valuation. But aside from these market value issues, there was some speculation and discussion of whether Apple would make a shift to Intel/AMD processors. They quote analyst Andy Neff as saying that OSX has set the stage for such a shift, which he believes will occur sometime around the end of the year, allowing faster processors at lower prices. He further believes Apple may begin licensing OSX for Intel. They also quote analyst Rob Enderle as saying Apple has already engaged in talks with Intel "It's a big problem: they are on non-competitive technology. With PowerPC, they don't have the economics of scale that Intel has. And they don't have Intel's co-op advertising dollars. So they can't maintain market share. Some people think they already have made the decision to switch." On a somewhat related topic, has anyone else noticed those "articles" in the past few issues of DV magazine entitled "Mac Afficionado turned PC enthusiast"? Up at the top of the page it says "special advertising section". The write up focuses on Stu Maschwitz, co-founder of The Orphanage, and says how he's switched to the PC and became much more productive. The strange thing is that nowhere on the page does it say who sponsored this "special advertising section". Presumably it's Intel or Dell, as there's some really tiny print at the bottom of the page identifying their trademarks.

May 25th, 2003, 03:44 PM	#2
Jeff Donald Warden Join Date: Mar 2002 Location: Clearwater, FL Posts: 8,287	The Intel switch pops up every so often. I think they would if the IBM 970 wasn't available. Supposedly, they even had AMD powered Macs running at their HQ with OS X. This project was rumored to have been abandoned earlier this year. The current thought is if Apple started producing AMD or Intel units the move would be on by investors to split the company in two. Hardware and software companies would be the result. Each could focus on the core business. I don't see this happening with Steve Jobs at the helm. But the stock needs to move up to keep investors at bay. __________________ Jeff Donald Carpe Diem Search DVinfo.net for quick answers \| Where to Buy? From the best in the business: DVinfo.net sponsors

May 25th, 2003, 04:20 PM	#7
Jeff Donald Warden Join Date: Mar 2002 Location: Clearwater, FL Posts: 8,287	It would be a port of the OS to Unix. OS X is Unix based, so it wouldn't be extremely difficult to port over. __________________ Jeff Donald Carpe Diem Search DVinfo.net for quick answers \| Where to Buy? From the best in the business: DVinfo.net sponsors

May 27th, 2003, 09:45 AM	#8
Jeff Price Major Player Join Date: Apr 2003 Location: Chico, California Posts: 357	Since the latest MacBidouille rumors have the 970 powermacs sitting in warehouses ready to ship on June 23 and the 980 and 990 chips already being developed it doesn't seem real likely for there to be an immediate shift to AMD or Intel. __________________ Jeff Price Flickerflix Nature Videos flickerflix@yahoo.com

May 27th, 2003, 03:04 PM	#10
Jeff Donald Warden Join Date: Mar 2002 Location: Clearwater, FL Posts: 8,287	If a port was done, "Legacy" software would run with emulation. This is how PC software runs on Mac now. I really doubt this will happen. All indications are that they will use the IBM 970 chip. A recent Business Week article all but confirmed Apple using the chip. __________________ Jeff Donald Carpe Diem Search DVinfo.net for quick answers \| Where to Buy? From the best in the business: DVinfo.net sponsors

May 25th, 2003, 03:47 PM	#3
Boyd Ostroff Wrangler Join Date: Dec 2002 Location: Mays Landing, NJ Posts: 11,801	<<<-- Originally posted by Jeff Donald :The current thought is if Apple started producing AMD or Intel units the move would be on by investors to split the company in two. -->>> This was also discussed in the Barrons article...

May 25th, 2003, 03:52 PM	#4
Alex Knappenberger High School Student Join Date: Apr 2003 Location: Canton, Ohio, USA Posts: 609	So what is the actual point? I think that if they started using AMD, or even Intel (it would be nice if it was AMD, though) processors, then many more people wouldn't be such "apple haters"...

May 25th, 2003, 04:03 PM	#5
Frank Granovski Outer Circle Join Date: May 2002 Location: Hope, BC Posts: 7,524	There's a lot of talk among Apple geeks that there will be a switch to AMD. Don't know if this is true or not (the switch). If Apple does switch, Apples will have to come with noisier fans. My friend's AMD "puter sounds like a vacuum cleaner. :)

May 25th, 2003, 04:09 PM	#6
Alex Knappenberger High School Student Join Date: Apr 2003 Location: Canton, Ohio, USA Posts: 609	Just a vacuum cleaner? Mine sounds like a jet. 6 92MM fans, 6 80mm fans...over 600CFM... Anyway, I think that would be cool if they switch to AMD processors, they would still run their OS, though, right?