Apple Leaps Ahead With Intel-based Computers

Starting today, Apple is selling a retooled iMac with the new Intel Core Duo processor. It's available with a 1.83-GHz Intel dual-core chip for $1,299 or with a faster 2.0-GHz dual-core processor for $1,699.

The company is also taking orders for the MacBook Pro, its successor to the PowerBook G4, which is slated to ship in February. The new 15" notebook comes in with either a 1.67-GHz Intel Core Duo for $1999 or 1.83-GHz Intel processor for $2499.

Jobs also announced upgrades to Apple's consumer content creation suite, iLife '06 ($79/free on new Macs), and to its presentation and productivity package, iWork '06 ($79/30-day free trial on new Macs). iLife '06 includes new versions of iPhoto, iMovie, iDVD, and Garageband, along with a new app, iWeb, a Web site creation, blogging, and podcasting program tied to Apple's .Mac Internet hosting service.

Apple's increasing effort to integrate its software with its .Mac service was the only nod to the concept of convergence—the effort to marry television and the Internet that companies like Microsoft and Intel were trumpeting at the Consumer Electronics Show in Las Vegas last week.

Jobs came to sell to new and improved—but proven—products. He made no mention of a rumored plan to make streaming, protected content available to the company's .Mac subscribers. Apple's digital living room, evidently, is still being renovated. That's hardly a surprise given the strain the rapid transition to Intel chips has placed on the company's engineering resources. There's always next month.

Jobs came to talk numbers: units sold and processor speeds. During the holiday quarter of 2005, Apple had its best quarter ever with $5.7 billion in revenue. Remarkably, about a fifth of that came from Apple's 135 retail stores, which collectively racked up more than a billion dollars in sales during the period. During the previous quarter, the company had $3.6 billion in revenue.

Jobs said he would spend most of his keynote talking about Mac hardware and software, despite the fact that the company's booming revenue comes from its iPod. Apple sold 14 million iPods during its holiday quarter, almost 10 million more than it sold the same quarter in 2004.

Having unloaded 32 million iPods in 2005, to bring the worldwide total sold to 42 million, Apple remains the undisputed champion in the digital music market. The company's iTunes Music Store, currently selling 3 million songs a day, has sold 850 million songs to date. It currently claims 83% of the digital music market.

Videos have been understandably slower to take off. Since the company started selling them about 90 days ago, along with video-capable iPods, it has moved some 8 million of them. But Apple keeps adding new content, like selected skits from the venerable Saturday Night Live, so further growth here seems inevitable.

Such figures easily eclipse the number of Macs Apple has been selling: more than a million per quarter in 2005, with a slow but steady rise. But Job made it clear he was aiming the spotlight on his company's computers.

Underscoring that point, Intel CEO Paul Otellini arrived onstage in a shroud of smoke wearing a chip engineer's clean suit to proclaim, "I want to report to you that Intel is ready." In a reply that surprised no one but was nonetheless well received, Jobs answered, "I can report to you that Apple is ready too."

Thus almost a half a year ahead of initial estimates, Apple has computers running Intel processors. Before the end of the year, Apple's remaining desktop computers, consumer portables, and servers will have Intel inside too.

The new iMac, Jobs explained, has the same design, the same size, the same features, and the same price. What's new is the speed: the Intel Core Duo delivers double or triple the performance of the G5 chip that powers the previous iMac model, based on estimated results of industry-standard SPECint and SPECfp rate tests.

The MacBook Pro fares even better when compared to the G4 PowerBook it replaces: Apple's newest notebook runs four to five times faster. It comes with a built-in camera, and digital audio inputs and outputs, definite assets for portable content creation. There's also an infrared remote, making the MacBook Pro ideal for presentations or, say, as a replacement for your television, if you're inclined to believe that Apple has a future in the living room.

It also comes with a new patent pending technology called MagSafe, which has nothing to do with computing performance but everything to do with great design. "How many of you have ever had your notebook go flying off the desk when someone caught the power cord on their foot?" Jobs asked. Judging by the audience response, attendees had experience with such incidents. With MagSafe, that scenario is history. MagSafe is a magnetic connection for the power cord that detaches without damage when pulled.

Jobs showed a new commercial touting Apple's new relationship with Intel that pulled no punches. The ad suggested that for years the Intel chip has been trapped inside boring PCs doing mundane number crunching: "Starting today, the Intel chip will be set free and get to live life inside a Mac."

But life inside a Mac is not so free as Jobs would have his audience believe. The Mac is chained to Microsoft and its Office suite for credibility in the business world. To assuage fears that Microsoft might sever the Office umbilical cord, Roz Ho, general manager of Microsoft's Macintosh Business Unit, appeared onstage to announce that Microsoft has agreed to keep updating Office for the Apple operating system at least the next five years.

No doubt that's some comfort, but users and competitors still see restraint. Apple made no moves to open up its iPod/iTunes eco-system. Beyond that, some of the new services in Apple's iLife suite, not to mention its recently released pro photo management app Aperture, are tied to Apple's .Mac service. Freedom at Apple has its limits.

Apple is building a beautiful garden no doubt. Were it not for the company's impeccable sense of aesthetics and unsurpassed machines, more users might question the walls going up to keep competitors out and customers in.