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Apple Hedges Its Bet on New Intel Chips

Posted on: Monday, 29 August 2005, 21:00 CDT

Aug. 27--Apple Computer has reached an agreement with Freescale Semiconductor to secure microprocessors for its notebook computers and inexpensive Mac desktops even as it switches to Intel chips.

Freescale agreed to supply PowerPC microprocessors for orders placed through Dec. 31, 2008 -- a year beyond Apple's planned transition to the Intel chips.

"I guess they're trying to hedge their bets," said Peter N. Glaskowsky, a microprocessor analyst for the Envisioneering Group in Seaford, N.Y. "If the PowerPC to Intel transition doesn't go as expected, they'll still have a supply of PowerPC chips."

Apple announced in June the dramatic switch to the rival Intel design after a decade of building computers with chips from Freescale, which was spun off from Motorola.

The Cupertino company warned investors in its most recent quarterly filing that its ability to market competitive products during the transition to Intel depended upon the willingness of Freescale and IBM to supply chips.

IBM is the sole supplier of the PowerPC G5 processor for Apple's current Power Mac, Xserve and iMac G5 products. Freescale makes the G4 processor, which is used in the company's eMac, Mac mini, and portable products.

Neither Apple nor Freescale would comment on the agreement.

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Source: San Jose Mercury News

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