Newspaper article THE JOURNAL RECORD

Apple Makes Monumental Change with Power Macintosh Introduction

Newspaper article THE JOURNAL RECORD

Apple Makes Monumental Change with Power Macintosh Introduction

Article excerpt

CUPERTINO, Calif. _ Apple Computer Inc.'s new Macintosh machines look like the 13 million others it has sold during the last decade. But they contain a new silicon brain _ and the company's future.

The No. 2 maker of personal computers on Monday introduced the Power Macintosh line. It is based on a different kind of microprocessor, a chip Apple says is faster and cheaper.

With the new machines, Apple is taking a bold step. No other personal computer maker has attempted so great a change in the basic design of its machine.

Apple's future is at stake, analysts say _ and the company concedes.

"I think it's a fair statement. But I'd rather phrase it a different way: If we don't innovate, we're dead," said Ian W. Diery, executive vice president in charge of Apple's personal computer division.

But the new machines also symbolize a much larger issue that could divide the personal computer industry in coming years. Other companies must decide whether, like Apple, to move away from a standard chip design that is tied to thousands of software programs in order to make faster, less costly PCs.

Power Macintoshes are based on the PowerPC microprocessor that Apple developed with IBM Corp. and Motorola Inc. It's known as a "RISC" chip, a kind of processor that makes decisions faster by using simpler instructions. Such chips are found chiefly in workstations, powerful desktop computers used by scientists and engineers.

"We're taking the high power of RISC and making it affordable and usable for the general public, which is going to give personal computing a boost as well as Apple Computer," Diery said.

He said Apple hopes to sell 1 million Power Macs in the first year, about a third of the company's projected sales of $8 billion _ an unusually ambitious target for a machine with a new chip.

Analysts say Apple has little choice but to proceed with PowerPC. The company lost a key advantage when Microsoft Corp.'s Windows software for IBM-compatible PCs made those machines as easy to use as a Macintosh.

That meant Apple could no longer charge higher prices than the competition. Last year, the company joined the industry price war, cutting the cost of Macs to the level of rival PCs. That depressed Apple's profits, forced it to lay people off and take other cost-cutting moves.

So Apple decided to make its machines stand out on speed. It is now eager to have its PowerPC-based Macs compared with lower-end workstations and PCs based on the latest chip produced by industry leader Intel Corp., called Pentium.

"It's critical to Apple if they want to maintain market position and if they want to expand market position and if they want to play in emerging markets," said Bruce Lupatkin, an analyst with Hambrecht Quist, a San Francisco investment firm.

Microprocessors are the chips of silicon that serve as the "brain" of personal computers. Apple has used chips from Motorola while every other PC maker uses Intel microprocessors or clones of them. Both Intel and Motorola in the late 1970s designed PC microprocessors using a more complex architecture known as CISC.

Software programs such as spreadsheets and word processors for the new Macintosh will run three to five times faster than those written for other PCs, said Tim Bajarin, president of Creative Strategies Research International in San Jose, Calif. …

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