In trying to make this blog worth your while, I don't want to just post for the sake of posting, but instead am going for quality over quantity. Still, some observations are worth making, even if short and sweet.
Google
I was asked on the Gilder Technology Forum if I thought Google was a candidate for profit taking after the recent incredible run. Not a chance. Again, I refer you to the very well written and researched blogs of David Gordon on Google, as well as my own instinct that this is a grand slam home run, over years, and we are only now at beginning of the Google story.
Apple
Apple made news yesterday announcing it was moving to Intel processors. I look at this news a hugely bullish, long term, for Apple, as it will now port it's operating system to a superior processor, opening a lot of doors. I am not as sure shorter-term what effect this may have on operating numbers as Mac owners like me will probably postpone any new purchases until the new Intel machines are out. Once that happens, Apple starts selling it's computers, especially notebooks, like hotcakes. The market should reflect this new Apple business model and it's effect on Apple's bottom line in advance, by about 6 months to a year. I will be investing in Apple accordingly.
2 comments:
NOT MAKING DUMB MOVES WITH YOUR MONEY
Today's online CNN News has a column on 15 things to be cautious about with your money.
They all have the sound of very reasonable advice.
Use the link below to go to the CNN News page. Look at the columns on the right side of the page a little more than halfway down. Click on the one that says: 15 DUMB MOVES
http://www.cnn.com/
If you want to read this, don't tarry. Tomorrow it will be gone. (The news moves on.)
IS APPLE ABOUT TO BECOME A BRIDE?
Here is the latest I, Cringley column who believes that is the case - and here's why.
The way Cringley wrote this article makes it sound that it has happened. Not so; it is just his writing trick for this column.
(Using the link will let you access the links mentioned in the column.)
http://www.pbs.org/cringely/pulpit/pulpit20050609.html
GOING FOR BROKE
Apple's Decision to Use Intel Processors Is Nothing Less Than an Attempt to Dethrone Microsoft. Really.
By Robert X. Cringely
The crowd this week in San Francisco at Apple's World Wide Developers Conference seemed mildly excited by the prospect of its favorite computer company turning to Intel processors. The CEO of Adobe asked why it had taken Apple so long to make the switch? Analysts on Wall Street were generally positive, with a couple exceptions. WHAT THE HECK IS GOING ON HERE!? Are these people drunk on Flav-r-Ade? Yes. It is the legendary Steve Jobs Reality Distortion Field at work. And this time, what's behind the announcement is so baffling and staggering that it isn't surprising that nobody has yet figured it out until now.
Apple and Intel are merging.
Let's take a revisionist look at the Apple news, asking a few key questions. The company has on its web site a video of the speech, itself, which is well worth watching. It's among this week's links.
Question 1: What happened to the PowerPC's supposed performance advantage over Intel?
This is the Altivec Factor -- PowerPC's dedicated vector processor in the G4 and G5 chips that make them so fast at running applications like Adobe Photoshop and doing that vaunted H.264 video compression. Apple loved to pull Phil Schiller onstage to do side-by-side speed tests showing how much faster in real life the G4s and G5s were than their Pentium equivalents. Was that so much BS? Did Apple not really mean it? And why was the question totally ignored in this week's presentation?
Question 2: What happened to Apple's 64-bit operating system?
OS X 10.4 -- Tiger -- is a 64-bit OS, remember, yet Intel's 64-bit chips -- Xeon and Itanium -- are high buck items aimed at servers, not iMacs. So is Intel going to do a cheaper Itanium for Apple or is Apple going to pretend that 64-bit never existed? Yes to both is my guess, which explains why the word "Pentium" was hardly used in the Jobs presentation. Certainly, he never said WHICH Intel chip they'd be using, just mentioning an unnamed 3.6-Ghz development system -- a system which apparently doesn't benchmark very well, either (it's in the links).
So is 64-bit really nothing to Apple? And why did they make such a big deal about it in their earlier marketing?
Question 3: Where the heck is AMD?
If Apple is willing to embrace the Intel architecture because of its performance and low power consumption, then why not go with AMD, which equals Intel's power specs, EXCEEDS Intel's performance specs AND does so at a lower price point across the board? Apple and AMD makes far more sense than Apple and Intel any day.
Question 4: Why announce this chip swap a year before it will even begin for customers?
This is the biggest question of all, suggesting Steve Jobs has completely forgotten about Adam Osborne. For those who don't remember him, Osborne was the charismatic founder of Osborne Computer, makers of the world's first luggable computer, the Osborne 1. The company failed in spectacular fashion when Adam pre-announced his next model, the Osborne Executive, several months before it would actually ship. People who would have bought Osborne 1s decided to wait for the Executive, which cost only $200 more and was twice the computer. Osborne sales crashed and the company folded. So why would Steve Jobs -- who knew Adam Osborne and even shared a hot tub with him (Steve's longtime girlfriend back in the day worked as an engineer for Osborne) -- pre-announce this chip change that undercuts not only his present product line but most of the machines he'll be introducing in the next 12 to 18 months?
Is the guy really going to stand up at some future MacWorld and tout a new Mac as being the world's most advanced obsolete computer?
This announcement has to cost Apple billions in lost sales as customers inevitably decide to wait for Intel boxes.
Apple's stated reason for pre-announcing the shift by a year is to allow third-party developers that amount of time to port their apps to Intel. But this makes no sense. For one thing, Apple went out of its way to show how easy the port could be with its Mathematica demonstration, so why give it a year? And companies typically make such announcements to their partners in private under NDA and get away with it. There was no need to make this a public announcement despite News.com's scoop, which only happened because of the approaching Jobs speech. Apple could have kept it quiet if they had chosen to, with the result that not so many sales would have been lost.
This means that there must have been some overriding reason why Apple HAD to make this public announcement, why it was worth the loss of billions in sales.
Question 5: Is this all really about Digital Rights Management?
People "in the know" love this idea, that Hollywood moguls are forcing Apple to switch to Intel because Intel processors have built-in DRM features that will keep us from pirating music and movies. Yes, Intel processors have such features, based primarily on the idea of a CPU ID that we all hated when it was announced years ago so Intel just stopped talking about it. The CPU ID is still in there, of course, and could be used to tie certain content to the specific chip in your computer.
But there are two problems with this argument. First, Apple is already in the music and video distribution businesses without this feature, which wouldn't be available across the whole product line for another two years and wouldn't be available across 90 percent of the installed base for probably another six years. Second, though nobody has ever mentioned it, I'm fairly sure that the PowerPC, too, has an individual CPU ID. Every high end microprocessor does, just as every network device has its unique MAC address.
So while DRM is nice, it probably isn't a driving force in this decision.
Then what is the driving force?
Microsoft.
Here is my analysis based on not much more than pondering the five questions, above, and speaking with a few old friends in the business. I won't say there is no insider information involved, but darned little.
The obvious questions about performance and 64-bit computing come down to marketing. At first, I thought that Steve Jobs was somehow taking up the challenge of making users believe war was peace and hate was love simply to show that he could do it. Steve is such a powerful communicator and so able to deceive people that for just a moment, I thought maybe he was doing this as a pure tour du force -- just because he could.
Nah. Not even Steve Jobs would try that.
The vaunted Intel roadmap is nice, but no nicer than the AMD roadmap, and nothing that IBM couldn't have matched. If Apple was willing to consider a processor switch, moving to the Cell Processor would have made much more sense than going to Intel or AMD, so I simply have to conclude that technology has nothing at all to do with this decision. This is simply about business -- BIG business.
Another clue comes from HP, where a rumor is going around that HP selling iPods could turn into HP becoming an Apple hardware partner for personal computers, too.
Microsoft comes into this because Intel hates Microsoft. It hasn't always been that way, but in recent years Microsoft has abused its relationship with Intel and used AMD as a cudgel against Intel. Even worse, from Intel's standpoint Microsoft doesn't work hard enough to challenge its hardware. For Intel to keep growing, people have to replace their PCs more often and Microsoft's bloatware strategy just isn't making that happen, especially if they keep delaying Longhorn.
Enter Apple. This isn't a story about Intel gaining another three percent market share at the expense of IBM, it is about Intel taking back control of the desktop from Microsoft.
Intel is fed up with Microsoft. Microsoft has no innovation that drives what Intel must have, which is a use for more processing power. And when they did have one with the Xbox, they went elsewhere.
So Intel buys Apple and works with their OEMs to get products out in the market. The OEMs would love to be able to offer a higher margin product with better reliability than Microsoft. Intel/Apple enters the market just as Microsoft announces yet another delay in their next generation OS. By the way, the new Apple OS for the Intel Architecture has a compatibility mode with Windows (I'm just guessing on this one).
This scenario works well for everyone except Microsoft. If Intel was able to own the Mac OS and make it available to all the OEMs, it could break the back of Microsoft. And if they tuned the OS to take advantage of unique features that only Intel had, they would put AMD back in the box, too. Apple could return Intel to its traditional role of being where all the value was in the PC world. And Apple/Intel could easily extend this to the consumer electronics world. How much would it cost Intel to buy Apple? Not much. And if they paid in stock it would cost nothing at all since investors would drive shares through the roof on a huge swell of user enthusiasm.
That's the story as I see it unfolding. Steve Jobs finally beats Bill Gates. And with the sale of Apple to Intel, Steve accepts the position of CEO of the Pixar/Disney/Sony Media Company.
Remember, you read it here first.
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