Apple at PowerPC makers' mercy – ex-exec

Former head of Apple Europe speaks the unspoken truth

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Apple remains at the mercy of its key component suppliers - in particular its processor providers Motorola and IBM - the former head of the Mac maker's European operation has admitted.

Of course, it's easy to say that once you're out of the organisation. Diego Piacentini, who now runs Amazon.com's non-US subsidiaries having bailed out of Apple a year ago, would never have said as much while still a staffer. Users know it, commentators and analysts know it, and Apple staffers know it, but it's rare that the latter - even at a year's distance from the company - will come out and say in public what's only said in private.

Piacentini's point, as detailed in an interviewed with Italian Apple-watching Web site Macity, is that while Apple is, simply, "under the thumb" of Motorola and IBM, primarily because the PowerPC isn't a desktop processor standard. With only one significant customer, Piacentini reckons, it's hard to devote the development resources to keep the platform at the cutting edge.

Which is exactly what Apple is dependent upon if it's to compete with the Wintel world.

"Relying on two suppliers means being always, always, always at the mercy of their deficiencies," he says. "Efficiency is achieved by economies of scale."

Worse, Apple has to keep in with both players in case one of them fails to deliver what it needs. "Motorola is a company in crisis, and IBM is only a little better off, but at the moment it's unthinkable for Apple to rely on [only] one of these," says Piacentini. "I'm sure this is a terrible situation, which keeps Steve Jobs awake at night."

It probably did, back in late 1999 when it Jobs felt sufficiently irritated with PowerPC partner Motorola to blame unexpected poor financial results on the chip maker's inability to ramp up volumes and clock speeds of the then recently released PowerPC 7400, aka the G4. Apple had to persuade IBM to start making the chips so that it would - eventually - have enough to meet demand.

Jobs' pronouncement followed well-publicised problems Motorola was having getting the 7400 to run at over 500MHz at a time when the x86 world was in spitting distance of 1GHz.

Says Piacentini to Webcity: "The 'Megahertz Myth' was a much discussed topic when I worked for Apple, especially regarding relations with the German marketing team, which insistently asked us to bring the nominal megahertz value to the competitors' one."

Not that he reckons the solution is to abandon the PowerPC platform. "We all know it's bad publicity to have a 500MHz processor when others have one of 1000MHz, but I don't think it's so important as to change the fortunes of a firm," he says.

"As they say here, it's 'nice to have', but since IBM, and especially Motorola can't have... let's not worry too much about it. The customer who wants to get a good buy, will find out for himself the difference between a Risc and a non-Risc processor."

Certainly, Apple seems to have survived despite opting for a non-standard desktop processor, though it's questionable whether it can build a bigger business on the back of other aspects of its systems, such as design or even MacOS X. What it should do, reckons Piacentini, is to broaden its range of core markets.

"My opinion is that by selling only to few markets in the computer sector, ie. mostly the consumer market - which is not what Compaq or Dell did - Apple received very severe blows." ®

Related Link

Macity's interview with Diego Piacentini (English version)


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