With the transition to Intel complete, Apple has a new goal: create next generation Macs that are so fast, they outright embarrass PCs running Windows. That will create a market differentiation that will poise Apple for its next assault on Microsoft.

Steve Jobs loves fast computers. For years, Mr. Jobs and his sidekick in keynote demos, Phil Schiller, showed how much faster an IBM PowerPC CPU in a Mac was than Intel CPUs in a PC at typical Photoshop tasks. The problem was that because Apple had such a small market share, and those PowerPC chips were included in a computer by a single-source vendor, and Virtual PC was such a mess, Apple couldnit get any real market traction.

A new approach is necessary.

Concept: MacBook touch

The new plan starts to put the pieces in place. First, convert to Intel CPUs to put Macs on equal footing with PCs and differentiate with a more secure, elegant UNIX OS. (FreeBSD, essentially). With virtualization, Macs can now run Windows at full speed, and numerous articles have confirmed that virtualization of Windows has been one of the reasons for the Macis gain in market share.

Now, Apple is in the second stage, first with the acquisition of PA Semi and then with todayis announcement that Apple is hiring a former IBM executive who was in charge of IBMis POWER architecture development.

This is not because Apple has a sudden interest in getting into supercomputers. Apple is done with supercomputing after a brief experiment from 2002-2005. Apple discovered that its culture was alien to supercomputing which required close partnerships, product continuity, on-site staff support, public roadmaps and total commitment. It was also short on big revenues so nicely available in the consumer market.

Looking at the Facts

Apple is known for putting subtle pieces into place (the parts) and then elegantly integrating them until the result is more than the sum of the parts. That allows them to spring technological surprises on the competition, then stay ahead in technology for a time. As the competition struggles to catch up, at considerable cost, Apple uses its buying power and economies of scale to systematically lower prices or add capability, eliminate any price umbrellas and put a price squeeze on the other guys. Money is made in huge chunks.

That means that when analyzing Apple, one has to look far and wide to collect the relevant tidbits before the picture comes into focus. Here are some tidbits.

• PA Semi works on low power and PPC designs.
• Mark Papermaster is a PPC expert.
• Apple bypassed Intel chipsets for NVIDIA for MacBooks to get speed.
• Apple has shown little interest in Intelis Atom CPU.
• The Mac Pro, for over a year, was not much faster than the last IBM made quad core PowerPC 970. No more Photoshop demos to be had at keynotes.
• Apple is not getting back into supercomputing.
• Apple made serious gains with PPC when Intel was foundering with Pentiums and Itanium.
• Apple designed, low power, complementary chips could give Apple a significant speed advantage and differentiation over PCs.

Concept: MacBook nano

Charting the Course

What I make of all this is that Apple wants to design and have built custom, low power, auxiliary hardware that would augment Intel CPUs and give Macs a significant speed advantage over Vista/Windows 7 PCs. Not just a few percent, rather, huge, visible chunks of speed. These chips would be unavailable to PC competitors on the open market. Companies like Dell that donit spend a lot on R&D and specialize in plane-Jane PCs with little value added and bogged down by Windows 7 will find that, suddenly, they are at an extreme competitive disadvantage. Customers will find that for only a little more money, the new Macs are a whole lost faster and still run Windows.

Once again, itill be the Steve and Phil show on stage showing how Macs are just amazingly faster than PCs -- even with the same Intel CPU.

Of course, there are obvious reasons why Apple feels that good old fashioned "need for speed." It continues to brand Apple favorably. It offers a true competitive advantage. It justifies Appleis refusal to engage in low cost, low margin commodity PCs. It makes Windows look bad. However, it also poises Apple for the next step in Mr. Jobsi strategy to make life a living hell for Steve Ballmer.

Iill address that in next weekis Hidden Dimensions column.