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PPC970 much cheaper than G4...Apple to go all IBM in 9mos time
- Thread starter jholzner
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Have you ever heard of a company having a better strategy than another? A different company selling a different chip might just decide to have a different price. Maybe they are trying to sell in volume. You should think about things before you call everyone else stupid... Plus it's not at all unrealistic that Apple would and could switch entirely over to IBM's chips in one year if they are really determined. Whatever man, my fantasy is better than yours anyway.Originally posted by ddtlm
People really need to stop believing this stuff. While it may be true that IBM is willing to sell 970's at prices lower than Moto will sell 7455's and 7457's, that is not likely. The 970 is so far beyond any 745x that IBM can charge just whatever they want and Apple would have to pay it. While it may be appealing to cast IBM as some loving gentle giant, the fact of the matter is that they are a large corporation. A profitable large corporation. They don't make money by giving away products that they can charge for. Yeah, they could pass up millions in revenue because they are nice...
Originally posted by Laslo Panaflex
1. I think that the 970's will be less expensive for apple as a chip, but knowing I don't think that this will effect the overall prices too much. Apple makes money on hardware, and they need all the money they can get right now. Sorry to say it guys, as much as you and I want to believe that good ol' Jobs is looking out for us, Apple is a business, and they make money and that's the first and formost thing for them, not making supercomputers at rock bottom prices.
2. The whole line all IBM by this time next year? Impossible, apple would never take the loss of all the stock of computers that they have that still have motorola, like the emacs, imacs, powerbook and powermac line. As I understand it, the ibooks have a IBM G3 chip in them so those don't need to be changed. But, if the new IBM chips are compatable with the boards that apple produces right now, then it would be no big deal at all to switch. Does anyone know if this is true? have anyone seen a gobi g4 chip? Even if it is compatable, you still have the slow bus speed and slow sdram, so wow big deal,more megahertz? that doesn't matter according to apple.
You have a person choosing between a Mac and say a Dell. The Equivalent Dell is much cheaper than the Mac. Only the hardcore Mac user is going to buy the Mac in that situation. Yes Apple is a Business and has to make money. However, they cannot make money if people do not see their systems as a good deal and buy a PC instead. A 3ghz Dell Dimension 8300 with 1gb of RAM, 120GB HD, 4X DVD burner, Gigbit ethernet, on-board sound, Radeon 9800pro graphics, WinXP pro, Microsoft Works suite, and Norton Antivirus can be had for $2572. The OS may suck, but it's good enough for most computer users. A similarly equipped dual 1.42 ghz G4 came in at $3458. Apple needs to find some way of lowering it's prices..
Maxkraft:
m_gerbik:
In another scenario, IBM might price some 970's low enough to make it work out in iMacs. This would add considerable low-margin volume that IBM might like. However Apple would need to have a system controller, motherboard, and slight case redesign to match. This is highly unlikely so soon because they have Xserves, PMacs and AluBooks to worry about first, so I don't think IBM would benefit from low-priced 970's here (yet).
I'm willing to believe that a year after intro IBM could be selling cheap 970's, but not so soon.
Clock speed does not scale linearly with number of pipeline stages.
m_gerbik:
So my disagreement with you implies that I didn't think enough about it?
They will set the price to where they think it will benefit them the most.
If IBM prices the chip low, say going from $600 to $300, they have more than halved their profits (since the cost of production is static). Apple would save $600 if they had two in a machine (PMac), and perhaps they would reduce their price by that $600. Would this more than double sales? If not, then IBM has not benefited in terms of sales.
In another scenario, IBM might price some 970's low enough to make it work out in iMacs. This would add considerable low-margin volume that IBM might like. However Apple would need to have a system controller, motherboard, and slight case redesign to match. This is highly unlikely so soon because they have Xserves, PMacs and AluBooks to worry about first, so I don't think IBM would benefit from low-priced 970's here (yet).
I'm willing to believe that a year after intro IBM could be selling cheap 970's, but not so soon.
Chip production costs rarely stay static. Typically yields are low when a chip is first produced and over time they refine the production and yields improve greatly. The better yields per wafer the lower the cost. Also when they move to the 9nm process costs will go down again as they will be able to get even higher yields per wafer and last but not least IBMs new plant is designed to work the the larger wafers so they can from the start produce more chips in mass production. IBM is set to produce these chips cheap. Also IBM plans on using these chips in there own workstations and therefore it would be costly for them to price them high as with any big business they will most likely have to sell the chips to themselves to show an expense for tax purposes and for profit evaluation.
I think macbandits point is good but remember ibm is actively working on the 970,power4,power5 and 980 to come. In the past 3yrs what has motorola done with their chip? NOT SQUAT! still dreaming of a g4 that can use a bus speed of better 133? I think the 970 will be better, cheaper and will produce in volume giving apple what it needs in a cpu maker who is actually interested in advancement and helping apple sell computers rather then motorolas take of doing nothing and then apple having to figure out how to cram 2 cpu's in one machine to make up for motorolas stagnation. Apple should give them the boot. The MAIN item in any computer is the cpu. You have to have a cpu that is advancing if you are to keep up with the wintel world. Motorola go back to you phones and toasterovens. WE need a REAL CPU MAKER like IBM.
Originally posted by ddtlm
People really need to stop believing this stuff. While it may be true that IBM is willing to sell 970's at prices lower than Moto will sell 7455's and 7457's, that is not likely. The 970 is so far beyond any 745x that IBM can charge just whatever they want and Apple would have to pay it. While it may be appealing to cast IBM as some loving gentle giant, the fact of the matter is that they are a large corporation. A profitable large corporation. They don't make money by giving away products that they can charge for. Yeah, they could pass up millions in revenue because they are nice...
But you forget the business of scale. If IBM sells 970s for $600 each, then potential customers will be fewer (barrier of entry, cost of final product) and those customers that bite will buy fewer (due to their own costs). If IBM sells them cheaper, then more people will be able to afford the chip, will be able to afford to use the chip, and most importantly buy more of the chips. Selling a thousand chips at $300 profit each is not as good as selling two thousand chips at $150 profit each - the overall profit is the same but the cheaper price will attract more people to purchase. In the case of Apple, if they can put 970s in iBooks and still sell them for $999, then Apple will buy more (many many more) 970s than if they cost so much that they could only be put in PowerMacs.
One of the things I can remember IBM execs said was that they wanted to wipe away the Itanium with the PPC970.
So they want to sell *a lot*, which would be very hard if the price is so high.
Also, as opposed to Motorola, they will sell the PPC970 to other computer manufacturers than Apple.
So they want to sell *a lot*, which would be very hard if the price is so high.
Also, as opposed to Motorola, they will sell the PPC970 to other computer manufacturers than Apple.
Rincewind42:
Assuming it ends up in a Mac at all.
Kamu-San:
Well the Itanium is easier to outsell that it is to outperform. Intel's sales have been very bad, as outlined by The Register (referencing the IDC): http://www.theregister.co.uk/content/3/30966.html . Perhaps between the Power4, the PPC970, and their decendants the Itanium can be beaten. But Intel has a lot of money. Billions have already been sunk into Itanium.
People won't buy PPC970's. People will buy machines wrapped around them, and if IBM halves the price or profit on a PPC970 the product holding it will not experience nearly as large a price drop... if it gets any at all. As I already outlined, it seems unlikely that halving the price or profit on a PPC970 would double the sales of an expensive machine since such as a PMac, and as I already outlined wether or not the PPC970 could be priced low enough for an iBook or iMac is irrelevant... Apple can't implement that hardware until they implement multiple higher end lines first. It takes time, regardless of Apple's long-term plans. I maintain that there is no incentive for IBM to price the PPC970 low initially, I say for at least a year after introduction.
Assuming it ends up in a Mac at all.
Kamu-San:
Well the Itanium is easier to outsell that it is to outperform. Intel's sales have been very bad, as outlined by The Register (referencing the IDC): http://www.theregister.co.uk/content/3/30966.html . Perhaps between the Power4, the PPC970, and their decendants the Itanium can be beaten. But Intel has a lot of money. Billions have already been sunk into Itanium.
Such as? Anyway, Moto sells G4's to anyone that wants them. You can buy non-Apple Moto powered computers from a small number of other companies.
People was a bad word to use. Corporations would be better, buying chips in lots of 10,000. As a corporation basing a product on a particular chip, I know that I would buy more chips (or at least plan to buy more chips) if they sold at a lower price point, as this would enable me to sell my product cheaper and/or make more profit from my product. This is not just because of the cheaper outlay for me, but also because I could expect more sales if one of the products key features was the new chip.
And it is entirely possible that if the chip were priced low enough, they could be used accross an entire range of products. After all, one of the major selling points (and cost predictors) of a computer is determined by the CPU count & speed. If you want to differentiate the PowerMacs from the iMacs, it's simple. PowerMacs get 1.6+Ghz and dual configs, iMacs get 1.2Ghz single. There's your differentiation. iBook/PowerBook would be similar. And suddenly instead of buying 10k chips, your customer is buying 40k - but only if the price allows.
I certainly agree that it takes time to plan and develop all of these products. But these kinds of deals aren't like you or me going to the super market to get groceries for the week. These are agreements that are made for minimum quatities of chips purchased over a period of time. The more attractive the price, the more likely the customer will agree to more chips over that period of time. If the price is unattractive, the customer may not even agree to a minimum order because they couldn't guaruntee their level of product sold.
So I entertain there is alwasy incentive to price your products reasonably (such that you get maximum sales and maximum profit). Selling less for the same profit is never a good thing - just look at Apple in the 80s.
Something else to point out is that when a large company develops a new product they usually don't amertize the cost out over a batch of chips. They usually go it costs us 'x' dollars in development and then sell the first product to themselves for the total cost of 'x' dollars and right off the expense. This comes back to what I was saying before that as a large multy divission corporation they sell the product to themselves so that they can use it in merchandise they sell (i.e. workstations). To do this they have to sell it at or near the price that they sell it to say Apple if it's in the same bulk. This is so it doesn't look like they are price fixing.
This is how I understand it from years of listening to a boss of mine spout off business accounting practices. If I'm incorrect and someone is actually educated on the proper practices please let me and us know so I can learn.
This is how I understand it from years of listening to a boss of mine spout off business accounting practices. If I'm incorrect and someone is actually educated on the proper practices please let me and us know so I can learn.
The 970 is not exactly a new product, most of its R&D comes from the POWER4, AltiVec is poorly implemented. This chip will not live more than 18 months, its a kind of transitional hack (like the 601 was a bridge between POWER and PowerPC), it will be quickly replaced by the 980.