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Friday, June 10, 2005

The Overreaction to Apple's IBM-Intel Switch

It amazes me how much the blogiverse is overreacting to the Apple's decision to switch to Intel. The speculation (and that's all that it is) that I've read so far is so ludicrous that I seriously wonder about the state of mind of 80% of the people out there that are supposed technology industry experts. It's clear to me that a lot of people out there who use technology and know technology don't understand a lot about business; which is scary. I've worked in a public tech company before and I can support this assertion first-hand. Otherwise intelligent professionals make insane decisions because they can't think economically. Some of the hysteria surrounding Apple's move also supports my feelings as well.
  • Robert X. Cringeley speculates that Apple and Intel are going to merge. Clearly this is tongue in cheek analysis, but interestingly it seems to be getting traction in the blog and slashdot set. This idea is absurd. Apple's switching to Intel because it realizes that IBM will never be able to address its needs as well. Clearly, Intel has been wooing Apple for some time now and IBM's recent inability to make Apple feel wanted precipitated the move. Jobs is smart enough to know that Intel will more aggressively help it innovate in certain areas. IBM has other designs.
  • Now the idea that does have a basis for merit is the idea that Apple is switching in order to provide stronger DRM. The copyleftists hate this, but I think it makes a lot of sense. Intel is clearly developing chips that will enable stronger DRM; at least strong enough to deter most users from doing it. Apple clearly loves being the premier provider of media-savvy computing technology to the market and having stronger DRM capabilities will go a long way in keeping content owners happy.
Is this bad for Apple? Not really. Are they going to Osborne themselves because of the preannounce? I don't think so. Apparently, Adam Osborne himself agrees. I'd buy a Mac tomorrow if I had to. I never buy v.1 of anything (especially cars and computers). The next generation of PowerPC Macs are going to be kick-ass machines and have very mature applications already on them. It's not clear that you'll need the new Macintels for awhile.
So what does this mean? It means that the hysteria is punishing Apple's stock price. Which means that I think it will trade down for a few weeks - months.
But I'll be watching for the turn-around when everyone figures out that it's not that big of a deal.
**Update: I found a short, but good summary of someone in the blogiverse that is positive on the switch here.**

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