Analyst: Apple Sending Message to IBM With Intel Talks

May 23rd, 2005 at 3:00 PM - Reports by Brad Gibson

News that Apple Computer has held talks with Intel Corp. to possibly use its chips in future models of Macintosh computers is a tactic to put pressure on the manufacturer of the PowerPC processor, IBM, a leading industry analyst believes.

Kevin Krewell, editor-in-chief of industry newsletter Microprocessor Report, believes Apple is trying to send a message to IBM that it should be its highest priority when it comes to the Power PC processor.

"iThis news came out the week after the E3 games Expo in Los Angeles, where IBM was very much in the center of all the talk as a number of major companies, including Microsoft, Sony and Nintendo, announced theyill be using the Power PC processor in new models of their gaming consoles," Mr. Krewell said. "Apple maybe feeling that theyire not getting enough attention paid to them and they also want IBM to concentrate more on a low-power version of the G5 processor for Appleis notebook PCs.

Mr. Krewell is convinced the leaking of the report by the Wall Street Journal was no accident.

"There definitely is a part of this that is pressure that Apple is applying to IBM," he said. "It is very unusual for this type of information to leak out of Apple."

The WSJ cited two industry executives Monday who confirmed talks have been on-going between Intel and Apple. Neither company would confirm the report, but one source said the announcement could come at Appleis World Wide Developers Conference, set to begin June 6 in San Francisco.

The report, citing two industry executives with knowledge of recent discussions between the companies, said Apple will agree to use Intel Pentium processors, but gave no further details. "Talks between Apple and Intel could founder, as they have before, or Apple could be engaging in negotiations with Intel to gain leverage over IBM," the WSJ report said.

It is not known if Apple would use Intel processors together with the Power PC processor, made by IBM, or if the deal with be a dramatic shift entirely to Intel chips.

An Apple spokeswoman called the report "rumor and speculation", but did not outright deny it.