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Apple Computer, Freescale Enter Into Purchase Agreement (UPDATE)
by , 5:55 PM EDT, August 26th, 2005
Apple Computer said Friday that it entered into a purchase agreement with Freescale Semiconductor Inc., manufacturers of the PowerPC processor.
Apple said in a filing with the Securities and Exchange Commission that under the terms of the agreement, Freescale must supply its microprocessors for orders placed by Apple through Dec. 31, 2008 -- full year after the date when the company plans to move its Macintosh computer line from PowerPC to Intel processor.
Apple said in the filing it is "under no obligation to purchase Freescale microprocessors" other than those on which work was in progress when the agreement was signed.
Apple announced in June it would switch to the Intel processor from the Power PC chip beginning in 2006. Freescale is formerly Motorola's processor unit.
The deal with Freescale doesn't necessarily imply that it is delaying the move to Intel processors, but that it might take longer than expected and Apple is making sure it will have a sufficient supply of processors to continue meeting demand.
Apple spokesman Steve Dowling declined to comment to The Street.com on why Apple signed the new purchase agreement with Freescale, but he said the company has not changed its plans to start delivering Intel-based Macs by "this time" next year or its schedule to complete the transition to Intel processors by the end of 2007. Intel spokesman Chuck Malloy declined to comment on Freescale's deal with Apple or whether any problems have arisen in Intel's own relationship with Apple, but said there has been no change in Apple and Intel's plans to deliver an Intel-powered Macintosh by June of next year.
Observer Comments
Fri Aug 26, 2005 7:32 pm Subject: What DOES this mean ?
That Apple will buy Freescale processors ? Great news. and totally unexpected …
That Apple will stop buying Freescale processors in 2008 ? Zzzzz …
That Apple HAS TO buy G4s until 2008 ? I hope not …
That Freescale is coming up with a "souped up" G4 ? THAT would be news, maybe excellent news, but might need some clarification …
Altogether a bit of very confusing news, as the move to Intel was supposed to apply first to the Mac mini and the notebooks, which are the only ones equipped with G4s …
Maybe the current lines will still be available, along with their Intel counterparts, until 2008 … meaning we might get to have a choice between 6 or 7 different models of laptops and 2 distinct lines of minis … Doubtful, but intriguing …
Fri Aug 26, 2005 7:39 pm Subject: or, Apple CAN buy G4s until 2008... AppleCare anyone?
Fri Aug 26, 2005 11:59 pm Subject: The warrant theory sounds right
Apple said they would complete the transition in 2007. So they shouldn't be shipping any Freescale-equipped Macs in 2008. The warranty theory seems right.
That said, Freescale is working on a souped-up G4 with multiple cores. It's quite possible we'll see this in PowerBooks early next year, and maybe even some other lines. But it doesn't seem like this deal really has much, if anything, to do with that.
dhp
Those assertions are educated guesses. What is clear from SJ keynote is Xserve and PowerMac will be last to transition. iMac G5 should be second last.
Since key reason for transition is performance per watt, an educated guess would be notebooks to transit first. And since it is prudent for Apple to recoup development cost as early as possible, higher price and margin to transit PowerBook first seems logical. Moreover, PowerBook needs an upgrade badly.
QuoteThere is approximately a 100% chance that these devices will be based off Intel products. TPM. Say it with me: TPM.Guest wrote:
Maybe they could be developing that ihome thingy we heard so much about a year ago. Tivo doesnt support the macintosh platform anymore. I think the home media option would be another cash cow like the ipod is if apple plays there cards right like they did with the ipod.
Mon Aug 29, 2005 11:16 am Subject: Waiting for dual-core Powerbook G4
The Pismo Powerbook 2000 was the last and best of the black Powerbook G3's produced by Apple, so I'm looking forward to the last and best of the Powerbook G4's that will be produced by Apple, hopefully a dual-core G4 model. My Pismo has lasted for 5 years, gone through RAM, hard drive and processor upgrades to a 550 Mhz G4 and is still going strong, so I'm hoping the last G4 Powerbook model will be just as durable and become a classic.
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