Apple Buying AMD? . . .

Here’s the article suggesting that Apple should buy AMD.

Here’s why there isn’t a snowball’s chance in hell of this happening.

When Steven Jobs came back to Apple in 1997, it was going down the tubes, fast. The number of Macs sold had almost halved in two years.

One of the first things he did was strangle the infant Mac clone industry. Say what you will about that, but aborting the Mac clone market also aborted any big growth in the Mac market and thus the sales of Mac compatible CPUs.

The head of Motorola’s CPU division at the time was saying things like, ”I.B.M. still has a very strong commitment to the computer world.” Not IBM and Motorola, just IBM.

One analyst at the time said, “The writing is on the wall. Motorola is clearly scaling their investment way back; the incentive isn’t there.”

And that’s just what they did. Development was cut back/slowed down, and, as Wikipedia puts it:

“Motorola had promised Apple to deliver parts with speed up to 500 MHz, but yields proved too low initially. This forced Apple to take back the advertised 500 MHz models of PowerMac G4. The Power Mac series was downgraded abruptly from 400, 450, and 500 MHz processor speeds to 350, 400, and 450 MHz. The incident generated a rift in the Apple-Motorola relationship, and reportedly caused Apple to ask IBM for assistance to get the production yields up on the Motorola 7400 series line. The 500 MHz model was reintroduced on February 16, 2000.”

Let Ars Technica continue the story:

The major problem with the 7400/7410 was that its short, four-stage pipeline severely limited the upwards scalability of its clock rate. While Intel and AMD were locked in the GHz race, Motorola’s 7400/7410 was stuck around the 500MHz mark for quite a long time. As a result, Apple’s x86 competitors soon surpassed it in both clock speed and performance, leaving what was once the most powerful commodity RISC workstation line in serious trouble with the market.

“. . . it wasn’t until the debut of the significantly redesigned PowerPC 7450 (a.k.a., G4+ or G4e) that Apple saw the per-processor performance of its workstations improve.

“While the 7450 gave Apple an initial clockspeed boost and a subsequent performance boost (especially on AltiVec code), and while it had excellent performance/watt, it wasn’t enough to put Apple back in the performance game. Intel and AMD had pushed too hard over the previous year and a half, and the kinds of performance gains offered by the 7450 weren’t going to cut it in the workstation and server markets. Of course, the 7450 and its derivatives might have had more of a competitive chance if Motorola had been able to scale their clockspeeds more rapidly, but in spite of the new design’s longer pipeline the chipmaker just wasn’t able to keep pace with the rest of the market.”

“During the 7400’s lengthy clockspeed drought and well through the reign of the 7450, rumors constantly surfaced in the press that Apple was going to switch to x86 processors. At the beginning of 2002, the performance situation for Apple’s desktop line looked incredibly bleak and it seemed that such a switch was inevitable. But around the middle of 2002, word got out that IBM had decided to produce a stripped-down, AltiVec-enabled version of its popular 64-bit POWER4 line, and it soon became obvious that the main customer for this chip was Apple. This processor, which eventually became known as the PowerPC 970, put Apple’s squarely back in the RISC workstation market and, if the rumors are to be believed, forestalled the company’s switch to x86 hardware.

The IBM-produced CPU kept Apple around for a few more years, but eventually, IBM didn’t keep up the pace, either, and Apple made its move to Intel.

The Ars Technica article was written in 2004, before the Intel switch, and we now know that Apple came close to switching to Intel in 1999/2000 due to its dissatisfaction with Motorola.

Who was that head of Motorola’s CPU division between 1997-1999 when Motorola stagnated and knocked Apple out of performance contention? Why, it was Hector Ruiz. And where does Mr. Ruiz get his process technology from these days? IBM.

For sure, there’s more to the story than that, but all we’re concerned about here is how Apple and especially Mr. Jobs might look upon this.

After all the CPU traumas he went through since coming back to Apple, why would Mr. Jobs be at all inclined to wreck his nice, new relationship with Intel and go back to the same companies and people who caused them? Rely on them? What’s in it for him?

Mind you, there’s that provision in the cross-licensing agreement that basically gives Intel a veto over any takeover. Think Intel would let Mr. Jobs slide so he could not only stop using Intel processors, but compete against him?

OK, Apple wouldn’t necessarily have to buy a majority stake in the company, they could just buy a big chunk of it, say 20-30% of the company with new AMD stock, but why would Stevie want to save Hector, given the history? What good does it do Apple?

Now if AMD had a killer lineup ready and its manufacturing was rock solid, and they looked certain to blow away Intel in the years to come, that might be a different story. But that’s hardly the case, is it?

Do you see why this is such a silly idea? There’s nothing in it for Apple compared to the huge risks and problems such a takeover or even big investment would cause.

Wishful thinking, that’s all it is.

Ed