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Chewing up three pieces of Apple news

In the last week, three major events have signalled a radically better future for Apple. The first one is the publication of IBM's plans for a PowerPC based CPU, named PPC970, which will be about twice as powerful as the best G4 available at the moment. Even more importantly, its physical details ensure that it will be easily developed beyond the initial 1.4-1.8 GHz clock frequency. It will include two vector units, the socalled AltiVec processing that is a major advantage of the G4s, and - more importantly - it will connect to the other processors and to the memory through a bus that is 1:2 scalable. In other words, the 1.8 GHz processor will communicate at an astounding 900 MHz! The maximum data throughput will be about SIX times that which is possible from the G4 - and every time the processor frequency improves, so does the bus speed!

What will probably impress the average potential buyer more is that it is one of the first 64bit CPUs on the market; however, in practical it will not mean much to the average user since 64 bit processing isn't faster than 32 bit processing. Normal (32bit) programs will run directly in a 32bit mode, yet when 64bit programs arrive (starting with OSX and - probably - Photoshop and (surprisingly) OSX) they will be able to give professionals the possibility of working with large amounts of RAM: 64 bit can directly address about 2x10^12 MB RAM - which should be sufficient for the next ten years or so....

Secondly , the French/Italian company, STMicroelectronics, is apparently negotiating with Motorola about buying out all of Motorola's Semiconductor business. This rumor has been launched as news by the reputable newspaper Financial Times and falls in line with previous statements by Motorola that the Semiconductor division had to become profitable, "or else...."

The ramifications of this "or else...." which apparently are about to happen are hard to estimate by a Macisto; on the one hand, any momentum left in the PowerPC part of the division might easily vanish and delivery might suffer; on the other hand, Apple is both a sizable and a reputable costumer for a corporation as ambitious as STM (this merger would make them the second-largest semiconductor company in the world) and so they might want to accellerate research and development in the Apple-relevant PowerPC areas. In spite of the IBM news, Apple will be needing both G3s and G4s for some time to come, until the PPC970 is viable price- and temperaturewise for the iMacs and -books.

The third momentuous event was the release of Apple's latest quarterly earnings report which clearly details the problems Apple is in, as well as delimits the options available to Apple. Most of that was discussed in the most recent BloQ (together with the momentuous rumor about the probable release of a journaling extension to HFS+, also detailed recently, but since its release isn't verifiable as yet (it is, however, part of the latest developer betas of OSX), so a few extra remarks will suffice.

Apple have clearly chosen to shrink its marketshare and build a momentum of technological innovation rather than lose money; however, the markets in which they succeed (iBook and iPod) are also the markets in which the profit per unit is the lowest. The real money lies in the professional segment, the area where Apple will be stunted for at least another year (xCepting xServe, but that is only an emerging market for Apple as yet); the company will try to stem the tide with a large number of hardware upgrades i January, will release some kind of iApp and iDevice soon, and will push hard in the server sector after releasing xRaid, a 4U size rackmounted battery of harddisks to complement xServe. Plus, they will do their best to push as many cheaper units out of the door as possible.

In spite of these forecasts, the future seems to lighten for Apple. The old Chinese curse, "May you live in interesting times", doesn't seem all that hard to suffer right now - these latest pieces of news mark the end to the recent doldrums of G5 uncertainty and features missing in 10.2 !

The Future of Apple

Recent comments from "industry observers" and "market analysts" have suggested that Apple's decline in market share and stock price is permanent and inevitable. While comments like that seem to be a cyclic inevitability, the response from macaholics are equally predictable: Apple's demise has been predicted time and again without ever coming to pass, its technologies "just round the corner" will be the "next ins****ly great thing" and lead to world dominance (and more importantly, the final victory over M$!), and the observers and analysts "just don't get Apple".

Neither group is right. Things are more complex - aren't they always? - and so either group is also partly correct. The result is confusion.

First of all, it is true that Apple's share of the overall unit sales is declining, both in absolute and relative terms. They are now the fourth-largest seller of personal computers, down two from last year. On the other hand, it is probably fairly accurate that there are about 25 million Apple users in the world; this number is fairly stable since Macs have a higher longevity (mixing metaphors?) than PCs. Looking at sales over the latest quarter, Powermac sales are down for the third quarter in a row (looking at the relative index, not the absolute numbers), and the only reason they seem to be bottoming out is that the introduction of dual 1.25GHz Powermacs with DDR RAM released part of the pent-up demand (accumulated over the last year and a half or so) - more due to desperation in part of Apple's focus customers (designers, etc) than because the new Powermacs were seen as being "great". While the sale of iBooks and iPods were up (indicating that people are more hesitant about spending big bucks to get "amazing" stuff, opting instead for the merely "adequate"), PowerBook (TiBook if you will) sales were stagnant, and all told the number of units shipped was disappointing, even considering the present "crisis".

The new iMac does not have the appeal that the old iMac had, and the eMac - though its successor formfactor-wise - isn't "with it" any longer. There are a number of disturbing parallels between the Cube and the new iMac, and they go beyond the similarity in emphasis on classical geometry. Nearly every criticism leveled at the Cube holds for the iMac, too (barring the "crack" debacle): lack of extensibility, overpricing, weak hardware specs (and - whether we want to or not - power), change of focus group. The design of iMac doesn't signal "consumer", or "teenager", or "family" computer; it looks hi-tech, minimalist, sculptural rather than productive, ephemeral rather than robust... the list goes on. In form, it is more an executive toy or a SWAP decorator statement than a connection point for a group. The (Zen-inspired?) form factor is out of this world, and out of the mass market.

iMac will not suffer the fate of the Cube, however. For one, that would be the death of Apple, and - more importantly - the death of Jobs as a tech guru. Instead, Apple will try to make it hold on to the customers, using compelling hardware (to with, the upcoming move to 17"/19" models only and upgrading of the motherboard to DDR RAM etc) and as low prices as possible. They hope - and need to pray - that the present sombre, factual 9/11 mood will gradually give way for the projected New World, post-millennial neoclassicism wave envisioned for iMac (and, to a lesser extent, i- and TiBook). North Korean weapons programs, Bushite Iraq-revenge fanaticism, and increased harassment from any number of terrorist/freedom fighter organisations seems to make it unlikely, however. The new Powermac turbo-Camaro macho front may be more turn out to be more in line with present sentiments...

As previously discussed on MacBloQs, OSX turns out to be an inconsistent collection of old and new technologies and UI ideologies, rather than the sleek, bloodline-sharp revelation it was envisioned to be. Hopefully, the inspired new technologies (RendezVous and Elvis the Journaling being the most significant) based on open or industry standards and the wonderful graphics surface will be enough to give Apple the two things that are needed to make OSX an unqualified success rather than a desperate necessity: time to integrate and develop not only the UI but the underlying APIs into consistency and usefulness; and hardware powerful enough to comfortably run this monster of a cycle gobbler.

The former will probably be reached to the necessary extent with the next point release, 10.3, particularly given the surprisingly revolutionary features planned for the two maintenance releases before then (for instance, journaling/metadata filesystem extensions and Sherlock developments). As for the latter, that is the touchstone of Apple's success (I dare not say "survival").

Doldrums. In spite of the upcoming hardware revisions, Apple will be in stagnant waters until October/November. That is the time when the 10.3 release will come out, and the time when IBM will be able to deliver the new PPC970 CPU in sufficient numbers. Apple needs much faster hardware to run OSX persuasively, since silicon, rather than code optimization, will be Apple's solution to the cries of "sluggardness" - it is faster to develop, and it pours hard cash into the coffers. Desktop PowerPC development has been at a standstill at Motorola for over a year now, ever since Apple gave up on them and turned to IBM as the more reliable and financially more secure partner. The PPC970 family will not only give Macs a leap forward in power here and now; it also seems well able to scale and increase in speed over the medium term. However, it is not the instrument here and now to improve on Apple's lower-market devices, the iBook and the i-/eMacs.

The Mac rumor sites have finally realized that there will be no Mac upgrades until January when Apple, partly to vindicate its decision to halt the ability to boot from OS9 on new Macs, will improve the hardware across the range. This will be based on relatively minor improvements from Motorola in the G4 (or G4+, as it actually is): no new bus but improved cacheing and slightly higher speed due to .13 micron production (which will also do a lot to improve on heat issues). The G3 in iBook will reach 1GHz (but without any VMX extensions hoped for by dreamers), the xServe/Powermac will reach (dual) 1.4GHz at the top (though Motorola will do its best to make it to 1.5GHz, just to spite IBM) and i-/eMac 1.2GHz. Add to that screen improvements for iMac and iBook and better GPUs across the board, and two things become clear: upgrading will be so compelling for macaholics that it will keep the sales up until October/November, and when the economy finally picks up (second half 2003, they hope), Apple will be in the enviable position of having top-notch hardware offerings - until then (as previously pointed out), Apple is actually helped regarding its dearth of CPU improvement by the lack of demand.

Come October/November, PPC970s will find their way into xServes and Powermacs, and the fastest G4s will move up to i-/eMacs and TiBooks. iBooks will finally use G4s (helped by yet another Motorola "shrink") and their clock frequency will be about 3/4 that of the bigger brethren. In other words, instead of a product matrix, Apple will have a St. Peter's product cross: at the bottom, iBooks (no longer two screen sizes), then iMacs, eMacs and TiBooks, and then the Powermacs and the xServe.

Apple's problem is the doldrums. Come January, they will have negotiated the first one safely. The longer, and more dangerous, stretch will be from April to October (hopefully not November) when everyone will realize that something major is within reach. If the upturn arrives shortly after New Year, Apple's plans could become void and their future a gradual decline. If the upturn is six months later, Apple could ride the crest (and take advantage of the time before the next major XP/.Net upgrade hits the market). It's in the balance. Apple is not doomed - but it is threatened by those two factors beyond its control. And no matter which improvements .mac will get, and how many new digital lifestyle appliances Apple releases - its future will be shaped by the timing of the economical upturn and the arrival of the PPC970.