Can Apple-Intel Live Up To Pre-MacWorld Hype?Can Apple-Intel Live Up To Pre-MacWorld Hype?

People just can't wait for the new year to see what is going to come to fruition in the much anticipated partnership between Apple Computer and Intel. An announcement of the first Intel-enabled Apple product is expected at MacWorld January 10. And while the rumor mill is buzzing, it could also be most inconsequential happening of the year in terms of impact on the commercial or enterprise market.If Apple CEO Steve Jobs does not announce a new Apple PC platform that will utilize Intel's latest Pentium 4 processor there will be extreme disappointment and perhaps open hostility by the Apple enthusiasts in attendance. Rob Enderle, an analyst with The Enderle Group, says there does not appear to be any new iPod platform scheduled to be introduced at the show. Apple will definitely want to generate headlines, and the new Intel platform is guaranteed to do just that. Enderle expects the platform will be a new Apple version of a home media center that will undoubtedly have a tight integration with the company's highly successful iPod line of digital music systems.

Highly successful is not a phrase generally associated with Apple's PC business. It has been highly resilient, with perhaps the most stubbornly loyal customers in the industry, but not highly successful. PC customers are usually extremely fickle, and will happily jump from Dell to Hewlett Packard or even a lesser-tier vendor if the price is right. And systems powered by Athlon processors from Advanced Micro Devices Inc. have recently outsold Intel-based systems in the domestic retail market, so even processor loyalty may be a relic of the past.

But Apple customers are always there, year after year. There problem is there has been so few of them. Apple currently has about a 3% share of the PC market, and that is an improvement over where the platform has been positioned over recent years.

In the enterprise, Apple is even less of a factor. The company has maintained a stronghold of sorts within the design community of many publishing and media houses, but otherwise the company effectively exited the commercial sector years ago. "Abandoned" the commercial space Enderle says, which will make any attempt to re-entrench the company inside enterprises even more difficult. Even the fact that increasingly "security conscious" IT executives would be envious of the lack viruses that strike on the Mac operating system will not be enough to offset the cost and complexity that would surround moving applications to a Mac environment.

Any significant shift that would bring Apple inside the enterprise will have to be a multi-year strategy. The first step will be to expand the brand within consumer markets and that looks like a potential for the first time with the long-overdue switch to Intel processors. There has even been speculation that some customer may buy the new Macs and install a Windows operating system, although there are questions of where any support would come for such a deployment.

If Apple can reconnect with a base of customers outside its loyal stronghold with its new Intel-based PCs, a longer term strategy to reintroduce the Apple PC into the enterprise might emerge, but it's likely to be long, uphill battle. Apple also currently has a very small number of customers using its servers based on IBM's Power processor, which in most cases operates within a Linux environment. An eventual move of Mac servers to a Xeon product line might also make that equipment more attractive to enterprise customers, although any significant deployment of a Mac operating system in a Unix environment seems doubtful.

Even beyond Apple's future as something more than the provider of the best music players and coolest looking PC platforms that no one buys, the Apple-Intel relationship is raising a lot of questions within the semiconductor and computer industries. That should not be a surprising development. Ever since the PowerPC was first introduced to much fanfare in 1992 by co-developers Apple, Motorola Semiconductor, and IBM, there has been plenty of hype, but increasingly lowered expectations as the years progressed, as well as heightening animosity between the partners.

Rumors have persisted that Jobs wanted out of the PowerPC straight jacket five to six years ago. I spoke with high-level Motorola executives during that same time period that viewed continued investment in PC-centric PowerPC designs for Apple as little more than a drain on resources. Motorola felt its efforts would be better suited to getting the PowerPC architecture entrenched as a highly effective embedded processor, a strategy that proved a success and continues today by Freescale Semiconductor, the company created when Motorola eventually decided to spin-off its semiconductor business. IBM likewise has found significant success in moving the PowerPC architecture up the stack into its highest-performing server platforms.

Now the PowerPC as PC processor is effectively dead, but surrounding controversy is far from buried. The leading PC manufacturers are waiting Job's Intel platform announcement with perhaps even a greater degree of scrutiny than the rest of the market. It is expected that the new Apple platform will use the latest generation Pentium 4 processors, which currently are not expected to be available in for volume distribution until March. Conspiracy theorists believe that Jobs and Intel CEO Paul Otellini came to a back room agreement that will provide Apple with the first available shipments of the latest generation Pentium processor in advance of its more established partners.

Apple is known to drive a hard bargain with its partners, and Intel has a reputation for being one of the nastier suppliers to work with at times in its history. One has to wonder if this is the start of a beautiful friendship, or the beginning of many years of head butting.