Apple risks Mac backlash on chip switch

APPLE Computer was today expected to announce that it is dumping IBM chips for use in the company's machines and switching to dominant player Intel in a move likely to test the patience of Mac fans.

Reports in the US said Apple chief executive Steve Jobs would use a keynote speech at the company's annual software developers' conference in San Francisco today to unveil the controversial move.

Rumours of such a switch have been swirling for weeks but many analysts have doubted that the company would take such a dramatic step.

If confirmed, it would be a major change in strategy by Apple, which has shunned Intel in the past in favour of IBM and Freescale Semiconductor as suppliers of the PowerPC microchips long used in its Macintosh systems.

Apple would not comment on the reports but if they are confirmed, it signals that Jobs hopes to increase the company's 2% worldwide market share by offering a broader range of low-cost machines.

The Wall Street Journal reported that Apple first plans to put the Intel chips in the Mac Mini - a low-cost PC it hopes will appeal to the new customers it has attracted through its iPod digital music player.

However, if the company switches to the Intel product, it will sorely test the loyalty of existing customers as programmes will have to be adapted to run on Intel's x86 chips, the driving force of rival Microsoft's operating system.

Mac users were forced to accept a change to a Unix-based operating system just five years ago. While that was seen as an improvement, it meant users had to buy a new set of software to run on the new machines.

'I don't know that Apple's market share can survive another architecture shift,' Insight 64 analyst Nathan Brookwood told website-News.com. 'Every time they do this, they lose more customers.'

The News.com report of the possible shift to Intel said Apple would begin the transition with the Mac Mini in the middle of next year and higher-end models a year later.

Jobs has been trying to get IBM to broaden its range of PowerPC processors but the company has resisted because of the high cost of developing the range for such a small market.

While the switch is unlikely to have a big impact on IBM, it will mean Intel tightens its stranglehold on the PC processor business, of which it already has 80% market share.

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