Wall Street not relaxed over Apple's move to Intel

Posted on Monday, Jun 06 2005 @ 23:59 CEST by Thomas De Maesschalck
Just like many Mac and PC users Wall Street wasn't at ease after Apple announced it will switch all of its systems from IBM PowerPC to x86 Intel Pentium processors by the end of 2007.

Analysts fear that Apple will lose a number of its loyal customers and they are also afraid for potential software compatibility problems. However, Apple is already providing tools to developers to port software and will also launch Rosetta, a technology to run PowerPC applications on x86 Intel processors.

Others fear that Apple might lose its exclusivity, since Pentium processors are a mass market product. They fear Apple might dilute its value and might have less control over the product roadmap.

After the announcement of the move to Intel processors Apple's stock today decreased with 0.32 cents in after hours trading, a drop of 0.84 percent. Yet some analysts believe the deal will be a good long-term opportunity for Apple.

Keith Bachman, analyst of Banc of America Securities, believes Apple might be able to reduce the cost of its systems with $100 by moving to Intel processors. Besides lower prices the systems should also offer more performance and use less power. The deal will also enable Apple to create Pentium M based notebooks with a long battery life.

Intel's shares dropped 16 cents, 0.59 percent, and IBM's shares dropped 79 cents, a drop of 1.04 percent in after hours trading.

Analysts say the drop is only a minor loss for IBM because they still have agreements to deliver PowerPC processors for Microsoft's Xbox 360, Sony's PlayStation 3 and Nintendo's Revolution.

More info at CNET


About the Author

Thomas De Maesschalck

Thomas has been messing with computer since early childhood and firmly believes the Internet is the best thing since sliced bread. Enjoys playing with new tech, is fascinated by science, and passionate about financial markets. When not behind a computer, he can be found with running shoes on or lifting heavy weights in the weight room.



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