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Strange Podfellows in High-Tech Alliance ; Apple, Intel Chiefs Introduce New Computer Line

Posted on: Wednesday, 11 January 2006, 15:00 CST

By MAY WONG, The Associated Press

SAN FRANCISCO - Apple Computer Inc.'s historic shift to Intel microprocessors came months earlier than expected as CEO Steve Jobs debuted personal computers based on new two-brained chips from the world's largest semiconductor company.

The first Macs to deploy Intel Corp.'s Core Duo processors will be the latest iMac desktop, whose circuitry is all built into the slim display, and the all-new MacBook Pro laptop.

When it announced the massive switch in June, Apple said it expected to begin making the transition by mid-2006. On Tuesday, Jobs was joined at the Macworld Expo by Intel CEO Paul Otellini to unveil the new jointly designed computers.

The shift comes as Apple is on a streak with its hugely popular iPod music players. Earlier, Jobs said the company brought in a record $5.7 billion in sales during the holiday quarter as it sold 14 million iPods - nearly three times as many units as it did in the same period a year ago.

But Tuesday's focus was on Apple's Macintosh computers.

Jobs said its entire Mac line will be converted to Intel by the end of this calendar year - a move analysts say could boost Apple's computer sales, which cracked 4 percent of the U.S. market last year after hovering around 3 percent.

"Companies don't typically underpromise and overdeliver, and that's exactly what Apple has done," Sam Bhavnani, an analyst with Current Analysis, said of the early launch.

Otellini came onstage wearing a clean-room suit that the chip company has famously used in its ad campaigns - and that Apple once lampooned in an ad of its own.

For years, Apple shunned Intel, which has provided chips that power a majority of the world's PCs, along with Windows software from Microsoft Corp. In the late 1990s, Apple even ran TV ads with a Pentium II glued to a snail.

But Apple, looking for faster, more energy-efficient chips, became increasingly frustrated in recent years as its chip suppliers, IBM Corp. and Motorola Corp.'s spinoff, Freescale Semiconductor Inc., failed to meet its needs.

Of particular concern was IBM's apparent inability to develop a G5 chip that would work well in notebook computers.

Intel, on the other hand, has been focusing on developing chips specifically tailored for notebooks. In 2003, it launched its Centrino notebook technology with a processor that boosted battery life by minimizing its power demand without hurting performance much.

During last week's International Consumer Electronics Show, Intel unveiled the latest generation, the Core Duo, which features two computing engines on a single piece of silicon.

It was that chip that the Apple decided to fit into the new iMacs and MacBooks.

The new iMacs will have the same all-in-one design as previous models and will be available with 17-inch and 20-inch screens for $1,299 and $1,699. Jobs claimed the new models are two to three times faster than the iMac G5, based on an IBM chip. The MacBook Pros - start at $1,999. Jobs touted it as the thinnest and fastest operating laptop in Apple's portfolio.

Shares of Apple jumped $3.07, or 4 percent, to a 52-week high of $79.12 on the Nasdaq Stock Market. Shares of Intel fell 47 cents, to $26.

Source: Record, The; Bergen County, N.J.

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