As reported by the press during the last two weeks, today Steve Jobs announced Apple's biggest strategy shift since the announcement of Mac OS X. Apple chose to scrap its ten year commitment with IBM and will begin a phased transition to the Intel architecture. The announcement was made by Steve Jobs during the WWDC 2005 opening keynote.
This is a historic event for Apple and the industry, that's why we thought it was important to provide, not only a live coverage, as we did on MacScoop.com [1], but also a complete report of the event, as detailed as possible. We also give our opinion on the announcements as conclusion of this report.
Some figures :
As he always does, Steve Jobs started with some figures : Apple has more than 500 000 registered developers from over 45 countries and sold about two million copies of Tiger. Jobs also mentioned the 109 stores, presented a video showing them off and pictures for the UK store.
As for the Music business, Apple sold more than 430 million songs on iTunes, more than 16 million iPods, the company claims to have 76% of the market share in the digital music players market (all kinds) and 82% of the market share in online music sales. Jobs also presented the forthcoming feature of iTunes which is podcasting.
The Mac :
In the Mac business, Apple is seing the market share of the Mac increasing and Apple's growth is much stronger than competition (about 40% against 10% for PC makers. Apple has sold nearly 2 million copies of Tiger and 15% of the Mac user base has already migrated to it. During the keynote, Jobs announced the next major release will be called Leopard and that it will be released by 2007, at the same time Longhorn is expected to be released.
Switching to Intel :
After mentioning the two major transitions that the Mac platform has seen (68K to PowerPC and Mac OS 9 to Mac OS X, Jobs started relating what was the main announcement of this keynote by saying "It's true", meaning that recent rumours that Apple was planning to switch to Intel were founded. Apple will indeed do the switch to the Intel platform in a two year transition. Jobs explained that IBM could not satisfly Apple with its production of chips : no 3Ghz G5, no G5 in the Powerbooks. Apple will ship the first Intel-based Mac by next year.
Two challenges :
For Apple software, the transition will be easy, as Apple has been developing x86 versions of its software during the last five years. And this includes Mac OS X. From release 10.0 to Tiger. Apple had x86 versions running in its labs and Jobs even performed a demo of a Penitum based PC running Tiger.
For third party developers, Apple will provide all the tools that they'll need to start working on the tranistion as soon as today. XCode 2.1 [2] developer tools is capable of compiling universal binaries that can run on both PowerPC and Intel based Macs and is already available for download to registered Apple Developer Connection members. Addionnally, Apple will start taking pre-orders for a kit [3] that includes : a 3.6Ghz Pentium based Mac, an Intel version of Mac OS X 10.4.1, a guide to universal binaries. The kit is priced $999 and is available only to Premier ADC members. It will be shipping in the next two weeks.
Developers showing their support :
Wolfram Research's Co-founder, Theo Gray, came on stage and claimed that he ported the application to Intel in 2 hours, changing only 20 lines of code. Microsoft's Mac Business Unit General Manager, Roz Ho and Adobe's CEO, Bruce Chizen, came on stage to explain that their commitment to the new platform by providing universal binaries for the future releases of their applications. Roz Ho also promised a new version of Messenger for Mac is coming in a few months.
Apple also introduces a new technology called Rosetta, which is a dynamic binary translator that runs transparently and translates the instructions sent by existing PowerPC applications to Intel instructions on the fly. What means that current applications will run on the new generation of Macs based on Intel processors. Jobs demonstrated PowerPC versions of Microsoft Office and Adobe Creative suite running on th Intel based Mac using Rosetta.
Intel's CEO on the stage :
Intel's CEO, Paul Otellini also came on stage and made a come back into the silicon valley's history, he even reminded and showed the "Toasting the Pentium" ad campaign that Apple started in 1996. Intel's CEO finnished his speech, plenty of humour, by expressing how he was happy about having a company like Apple as customer.
A happy ending?
Steve Jobs ended the keynote with a summary of the announcements. He also stated "more than the processor, more than the hardware innovation we bring, the soul of the Mac is at the operating system" and thank the audience before leaving the stage.
Interview at CNBC :
Immediately after the keynote, Steve Jobs was already available for a brief interview [4] with Ron Insana on CNBC. During the interview he gave a sum-up of the announcemnts made during the keynote, and highlighted that Apple and IBM remained in very good terms and that Apple will continue to release Macs based on IBM chips in the near future.
Our opinion :
Apple is making the transition to Intel smooth and pretty easy. It is providing tools to create universal binaries while backward compatibility of existing PowerPC applications are assured through Rosetta in a transparent way for the user. Considering these facts, it looks like the transition to the Intel architecture is not a so crazy decision.
IBM and Freescale currently prevent Apple from reaching the mainstream market because of their incapability to produce processors in very high quantities. Intel at least will allow Apple to make its line of Macs evolve according to competition and market demand and won't depend on the production capacity of its supplier any longer.
However, Apple may face two problems during and after the transition.
The first, which will come during the transition, is the fact that a lot of users who were about to switch to Mac or who where about to upgrade to a faster one, may delay or cancel their purchase. That could happen because of the concerns that the current architecture could quickly sound obsolete and that could result to a drop on Mac sales.
The second problem will come after the transition. It is the lack of differentiation between the Mac and the PC hardware which could confuse some users who won't understand why Macs and PCs use the same hardware architecture but can't use the same operating systems. Some of them will prefer waiting, speculating that Apple will release Mac OS X for the PC platform.
We believe the biggest challenge for Apple won't be convincing the developers but actually the users. We hope Apple will find a way to make the Mac attractive enough so as to not lose market share during this transition. That could be achieved through strong marketing campaigns for current and future Mac OS X releases combined to to attractive and competitive hardware.
Now it's your turn to give us your opinion. Mac users, PC users and developers, send us [5] your opinion on the announcements made during WWDC 2005. Tell us if your next purchase will be a PowerPC-based Mac, an Intel based one or a PC. Developers, tell us if you're going to support the new architecture and bring universal binaries by next year.