Tuesday, June 21, 2005

Maybe it wasn't IBM or Motorola's fault - but maybe it was - How Apple May Have Planned To Get Into The Processor Upgrade Business

I had an interesting thought late yesterday while testing a PowerLogix G3 upgrade that I had lying around.

What if the move to Intel processors was partially motivated by the dislike for the Apple Processor upgrade market?

I have heard heard random whispers from those in the know at Apple - that one barrier to the Mac's success (as perceived by Apple) is the processor upgrade market.

The main players are (or have been):

Sonnet (recently diversified into other products than just CPU upgrades)


Newer Technology (now part of Other World Computing)


Daystar (which has been through multiple reorganizations)

Quotes from Low End Mac:

"Apple had deliberately chosen to thwart third-party (effectively any) processor upgrades by mounting the boot ROMs on the processor daughtercards.

Apple has consistently refused to license Apple ROMs to third parties -- and without a supply of ROMs, upgrades were impossible."

I know for a fact that one reason Steve Jobs loves the All In One design (such as the original Macs, eMac, and iMac) - it can't be easily upgraded or upgraded; at all.

I have also been made aware that there was possibly about to be a breakthrough with the G5 by at least one upgrade manufacturer that would have allowed most G4 towers to have G5 upgrades.

So, was this a motivating factor in Apple's decision to switch from the PowerPC to Intel processors? Is Apple possibly planning on selling upgrades in the near future? Is this a way to eliminate your competition before you come to market?

Apple is often very evil in it's subtlety.


So, you see, Motorola and IBM sold processors to third party manufacturers for the processor upgrade market. Intel's newest processors have a Digital Rights Management feature on them. This DRM would effectively limit the sale of processors to whomever Apple wished them to be sold to.

Third party processor upgrade manufacturers would often get processors on the black market - buying them from Cisco surplus - buying in bulk on eBay - etc etc. Now, Apple can tie processors directly to it's own machines - and completely eliminate the majority of the black market.

[UPDATE] The comments section has a number of insightful posts - some that disagree with my theory here. Take into account that I don't think this is a main reason, or even a top ten reason for the switch. It is, however a possible motivating factor and, at the very least, a consideration.

Many who said that Apple didn't choose INTEL because of the DRM issue - may have been wrong afterall ... this further propogates my theory on control of the processor by Apple and as a means of possibly selling Apple branded Upgrade processors:

From Slashdot:

Apple: Mac OS X Intel Kernel Uses DRM

Monday August 01, @01:07AM

from the folks-are-surprised-about-this-why-exactly? dept.

An anonymous reader submits "Several people have discovered that the new Intel kernel Apple has included with the Developer Kit DVD uses TCPA/TPM DRM. More specifically, it includes "a TCPA/Palladium implementation that uses a Infineon 1.1 chip which will prevent certain parts of the OS from working unless authorized."



Anonymous said...

Its an interesting thought but quite frankly I don't see the processor upgrade market as that big a deal. Although on the PC side upgrading is a pretty big deal, Macs generally don't get upgraded beyond RAM and HD. Hard Disk upgrades are an even lower percentage due to the all in one nature of most Macs.

The fact is that the PowerMac G5/G4 line makes up approx. 15-20% of Apple's installed base. The rest is all non-user upgradeable. Out of that 15-20% perhaps a quarter choose to upgrade more than the RAM. I don't think it'd be in Apple's interest to dominate such a small market opportunity...

FYT said...

Apple is rarely motivated by finances - at least Steve Jobs is rarely motivated by finances.

For there to be so many competitors - it must be a relatively lucrative market.

You may also forget that Apple themselves - used to be in this market as well.

Also, it's not really an issue of making money from potential upgrades, but losing sales of new computers that are not sold by Apple directly because people are upgrading their old boxes.

I have pretty good word that there was about to be an onslaught of G4 and G5 upgrades for a lot of all in ones and even Apple laptops using the solder/desolder process that has been deployed in the past.

Anonymous said...

actually quite a few UNupgradeable macs have been upgraded, with video cards and processsors, including powerbooks g3's, Titanium G4's, Cubes, Imac G3's,the exception being the G5 models, ibook, imac g4, emac G4, Al G4 and mac mini (which you can can overclock slightly and void your warranty).
so i would put the upgradable macs at closer to 50%, and out of that nearly every one that still uses one has upgraded the ram and harddrive (firewire usb2).
I agree however that Apple is probably not motivated by a limited market, however if they wanted to they could make a killing upgrading G4's and G5's to intel, but would loose quite a few new sales also.
I do believe Apple is motivated by finances first and foremost as most companies are. everything else is secondary.
hmmm. the Imac G5 has an upgradeable board and the powermac G5, if Apple had an upgrade path to intel that would use cooler chips in the imac and offered better performance in the G5, it would be all good! IMHO

Anonymous said...

actually a trade in plan would be best!!

Anonymous said...

What if they just want to kill the upgrade-market. And not really overtake it?

Anonymous said...

Sounds like conspiracy theory to me!

I'd guess that Apple also announced the 3Ghz mac 2 years early (hurting sales of systems for most of that year) just to embarrass IBM and IBM was just too cool to call them on it.

I bet Apple has had a working G5 Dual core laptop for a year and has just held it back so they could throw it up in IBM's face. I'll bet the G6 chip that was talked about 2 years ago based on the Power5 chip is already ready and Apple just didn't want to have the fastest systems to make it easier to move away from IBM.

Come On!

Apple's market share is such that it is not financially viable for IBM to keep up with Intel even with the advantages that the powerPC design allow. This came to a head right now because IBM is focusing more effort into game system processors and although similar in some ways they are enough different that one does not directly help the other. Worse yet, high demand for these new game chips will limit Fabrication availability at IBM and chip shortages for Apple would have been inevitable.

So Apple had a choice. Move to Cell and make some major updates to OS X, their core applications and ask developers to do the same. Or, move to Intel and do the same thing. The difference was that Apple had already done the work to move to intel which made this a bit of a no brainer.

Secondary benefits will be the ability to sell Apple hardware to Windows users and the ability for Mac users to run Windows applications (in something like Virtual PC) at full speed. Further, the larger PC market will be doing some of Apple's hardware R&D in everything from processors to chip sets.

But I'm sure the small upgrade market was the real motivation.

Anonymous said...

Steve may personally want to kill upgrades because he erroneously believes they hurt sales of new computers, but that's not a good reason to switch to Intel. It's all about the Pentium M kicking the G4's butt and there being no mobile G5 in sight.

Apple has always believed that people should buy new computers rather than upgrade their old ones. Unfortunately one of the appeals of a PC is how easily and inexpensively one can add or replace components. A new motherboard, processor and RAM usually costs less than a Mac processor upgrade.

Anonymous said...

Pretty unlikely. While most macs are upgradable (even imacs), the fact is that most people who buy them for the very purpose is that they don't have to worry about opening them up and 'upgrading' them - they just give them to their kids or to a school. The people who are savvy enough to put in an upgrade processor or know how to get it installed usually give up also. In 5 years, the imac has gone from the G3 to the G5 and has jumped in just the microprocessor speed from 233 to 1.8 MHz (not counting all the other advanced in bus, RAM, etc ...) so the remaining % of people thinking of upgrading realize ... hey, for a few dollars more than buying an upgrade card, HDD, RAM, etc ... I can get an eMac or MacMini with TIGER, ILIFE 05, etc ... why bother?

The LAST thing Apple wants to have are upgrade boards lying around trying to guess if people want to buy them or not. They want to make it enticing to upgrade the ENTIRE computer through design, features, speed or whatever. And right now, Apple is doing that - every 6-9 months, there is some new upgrade or feature enticing to people.

Yes, there are some very cheap DIYers who think good enough is good enough but the rest are places like schools who cannot afford a new computer but can afford a $200 upgrade card to make it a little faster.

Would Apple prefer that no 3rd party upgrade cards be available? Probably but that doesn't mean they want that business. They make more selling you a Mac Mini than they would selling you an upgrade card. If nothing else, an upgrade card is so much more of a harder sell - it's NOT sexy. It's like buying virus software - nobody eagerly wants to buy it - but a new computer? who can resist that especially if you do it logically - $200 upgrade card, $100 new HDD, $75 RAM, $130 Tiger OS, etc ... why not buy a Mac Mini?

Apple might have many hidden motives for switching to Intel that we might never know of but the processor upgrade business is not on that list.

Hart Hansen said...

I don't think it has anything to do with the upgrade market. Apple doesn't like the upgrade market because they want you to buy a new Mac not upgrade your old one, and why does anybody pay so much for a upgrade anyways you can sell your old mac for quite a bit of money on ebay. Mac's hold their value like a Honda.

The switch has to do with 2 things.

1. IBM cannot spend the money Intel can on reaserching and devolpment. Intel owns like 50% of the processor market and Macs compose 7%. If they stay with a G5 they will always be behind the 8 ball.

2. OS-X will take over the windows market. Steve Jobs is saying he won't sell OS-X to other computer makers, but do you really think that is true?
Do you think Apple or Steve doesn't want to have the power and money Microsoft does because of Windows?
Windows Sucks everyone knows it. Now that Macs use Intel processors they can port OS-X to Dell and who ever wants to pay for it. People are tired of the incredible security problems that windows has, people are tired of Windows just being a sucky program, that Bill Gates and Microsoft does have to bother to ever improve, because they don't have to.
They are a monopoly.
Now I am 99.9% sure that Steve Jobs is finally getting his revenge, for what Bill Gates did to him 20 years ago. He is doing right back to him. When Steve heard about rumors that Bill Gates was making Windows (which was and still is bad stolen copy of the Mac-OS which he got a bunch of macs before they even were available to the public, by pretending to want it so he can make Office for it.) Bill Gates came over to 1 Infinate Loop and lied to his face about what windows really is. Now Steve is lying right to Bill's face by saying that he won't release OS-X for PC Makers.
Yeah right Steve doesn't want anything to do releasing software that made Bill Gates the richest man in the world.
He is lying so that Bill will not have the chance to actually start to make a decent OS. So that Bill will just sit back in his comfy $50 billion dollar chair and be the lazy OS maker, who releases crap. Thinking he has nothing to worry about. Hell he just bought off Congress, and the Supreme Court from passing an anti-monopoly action against Microsoft. He must be pretty full of himself.
While Steve gets ready to release OS-X for the PC that will do some serious damage to Windows market share. First business will switch over then home users will follow suit because all the software companies will be making as much software for OS-X As they do for the PC. Not to mention that PC games will just about automatically work on Intel Based macs anyways, and OS-X. Games don't really use Windows interface anyways. They just use the processor code.
Well I have said too much already. I will say no more becuase I am rooting for my home team Apple, and the more I say the more Bill Gates ears might perk up, and get a little afraid as he should be.
-Hart Hansen Zaiko

Anonymous said...

Just a correction. Intel processors do not have built in DRM. Intel does have chip sets that have TPM (trusted platform module) but Apple could have created a chip set with the same for the PPC if they wanted to.

Intel says there's no DRM in 945 chipset

FYT said...

There will be processors out SOON by Intel that will tie the chip to the manufacturer or to the motherboard.

Thanks for the linkage - I read that at slashdot too.

As to the naysayers - RTFA - I said this was a partial motivator for Apple not the main reason, not even a top ten reason. It is an interesting thought though.

Anonymous said...

Like DRM is going to stop anything. It will be broken before the hardware even hits the street if it contains it. And the 3rd chip sellers will simply sell you a chip and then rely on you to download the DRM cracks.

FYT said...

What if they just want to kill the upgrade-market. And not really overtake it?

Possible - I think this is a minute reason for the change.

I know with 100% certainty that the upgrade market is highly frowned on at Apple.

FYT said...

actually a trade in plan would be best!

That would be a great plan - and then Apple could donate the VERY capable machines to education. Tax write off and evangelism rolled into one.

Middle-agedman said...

Based on my understanding of the switch to Intel announcement, Apple was motivated by two things: Speed and Supply.

Steve Jobs made it clear that the IBM/Motorola chips were not "coming up to speed" as fast as he felt Apple needed for them to do so. I believe that he has had this fear for at least the past three years; like it or not, most people look at processor speed as their main baseline and Apple has always lagged behind the PC in this area. We tech-head Mac-o-philes can argue all day and all night about latencies and wait states and cache and so on and we would be RIGHT. However, most people won't hear the good word and will continue to believe in the myth of the faster-processor means faster-computer mindset, which means that many won't choose Apple.

Problem number two was supply. Whether or not the IBM/Motorola processors were being produced at a high enough gigahertz clock speed, the supply has always, always been a problem and this has directly affected Apple sales and the wait time of those that need the fastest computer.

If Intel could solve both of these problems, it is hard to see why Apple would be smart in continuing with the status quo. Speed and Supply were the two motivators as I see it.

That said, I totally agree with JW that Steve Jobs is probably very happy with the impact that this will have on the G3-5 upgrade market. He has never liked the idea of people modifying "his creations." This is evidenced in the iPod and the Mac Mini as well as in the eMac and iBook machines.

I would guess that this was a happy coincidence for Steve, rather than a motivator. This is too big of a move to have been even moderately influenced by his dislike of upgrades.

FYT said...

Apple could not and would not have been able to add any DRM to the PowerPC for several reasons:

1) They really had no motivation to do so
2) Cost - even 1 cent on a large scale is huge
3) The PowerPC is used in all sorts of different ways

Number 3 is worth elaborating. Some of you have brought up the point that the Intel processor market is much larger. In fact, it's not as big as you may think. PowerPC (and other RISC chips) are very commonly embedded or contained within onboard systems - such as Cisco routers and car computers. (And of course now we know - all 3 next generation gaming consoles from Nintendo, Microsoft, and Sony)

These markets have no need for progress as they tend to build subsystems to compliment the CPU rather than upgrading the CPU every six months as computer cycles often are.

I don't think it could be stressed how much Apple truly loathes the upgrade market. This at the very least will have some effect in their bottom lines if they do not diversify.

At this time, we know precious little (even with the development boxes) about what kind of hardware Intel will be truly assisting Apple with. All we know now is that it will be Pentium based.

As for Intel saying there's no DRM in their chips, that's right - but this is more of an "improper use of terminology" than anything. Their current chips DO have security in them that can tie chips to motherboards and I do believe Apple will eventually deploy this technology. Intel has stated they have even deeper tie ins possible. Although neither will matter if Apple chooses to go the same route it took with PowerPCs; by soldering to the motherboard.

Let's also face a simple fact - a lost sale is just a lost sale. But, let's say conservatively that the upgrade market represented 5% of all Macs sold pre 2003 (there has not been an upgradeable Mac sold since then) Between the period of 1994 and 2003 Apple sold roughly 5 million upgradeable Macs. These included:

PowerBook 500 series (before 1994???)
PowerBook 1400/2400/ Lombard/Pismo
Beige G3
Original CRT iMac
1st Gen slot load iMacs
G4 Graphite
G4 Quicksilver
G4 Mirror Door

5% comes to about 250,000 computers! I doubt, with Apple's industry high margins that they look lightly on 250,000 more Macs not making it into the channel.

Again, I'm not here to say that this was a main reason, it was simply a thought.

I do believe the main factors in this switch were:

* Production/capacity
* Processor speed stigma
* Processor roadmap
* Iintegration with future technologies
* Partnership concerns with Intel because of recent advancements made in I/O and Wireless

So, as buzmania said, it was most likely coincidence, but I would shutter at the thought that this had not crossed Steve Jobs mind at all.