Power PC Alliance on last legs

By Richard Morochove

First published September 18, 1997

You don't mess around with Intel.

That's the sad lesson learned by the PowerPC Alliance of IBM, Apple Computer and Motorola. Six years ago the trio banded together to create an alternative to the high-priced processors from Intel. They promised to deliver personal computers based on less expensive, more powerful chips that would run a wide variety of operating systems.

Today, the PowerPC Alliance is in tatters and its future in doubt. Few computer makers use the PowerPC chip. One alliance member, Apple Computer, is taking actions guaranteed to kill support from the independent computer makers who were sufficiently brave, or foolish, to bet on the PowerPC.

In part, the alliance failed because Intel refused to become a sitting target. Under the threat of competition, the world's largest chipmaker revved up its development cycle to produce more powerful chips faster than ever before. When it looked like PowerPC chips would undercut Pentium prices, Intel reduced that problem at the stroke of a pen. It cut prices and has continued to reduce processor prices every quarter, yet still maintains a healthy profit margin.

At the core of the PowerPC Alliance was the CHRP, Common Hardware Reference Platform. This standard makes it easier for several operating systems to run on PCs from different hardware makers.

When the final CHRP specification was announced in November 1995, a number of operating systems were promised: Mac OS, OS/2, Windows NT, Solaris, AIX and NetWare.

IBM was the first to drop out, announcing the "suspension" of development work on OS/2 for the PowerPC until the end of 1996. That suspension was Big Blue double-talk for killing the system.

While Solaris for PowerPC is technically still alive, it's a couple of versions behind releases of the system for other hardware platforms. Earlier this year Microsoft announced it wouldn't develop future versions of NT for PowerPC. Novell never did deliver NetWare for PowerPC, no surprise in view of the company's continuing problems.

We're left with IBM selling a few high-end RS/6000 workstations based on the PowerPC chip and running under AIX, a version of Unix. Big Blue also likes this chip for low-cost network computers.

Of course, there's Apple Computer, which is estimated to use 9 of every 10 PowerPC processors manufactured by Motorola and IBM.

Last month, Apple Computer shipped Mac OS 8, the first Mac system to support the CHRP. Yet now that its software can support wider use of the PowerPC, Apple seems determined to kill it. Apple says it will not certify any CHRP computers made by others as Mac compatible.

It's clear that Steve Jobs, who is interim CEO of Apple Computer, doesn't like the idea of Macintosh clones. Mac OS licensing negotiations with the clone makers were suspended after the July departure of former Apple CEO Gil Amelio.

Apple Computer has agreed to buy the Mac business of the biggest clone maker, Power Computing, for $100 million (U.S.). According to Apple execs., almost all of Power's 200,000 customers were former Apple customers.

Power Computing allowed customers to order a computer directly from the company and customize its configuration. The computer usually cost less than the equivalent Mac from Apple. Power often delivered machines based on new and faster PowerPC chips long before Apple Computer. To add insult to injury, Power Computing earned healthy profits while Apple Computer racked up enormous losses.

Apple viewed Power as a cannibal. Apple execs have lived in a dream world for so long they don't understand the marketplace. Apple's real competition is Intel computers that run Windows. Yet Apple management's warped view of reality sees the company cosy up to Microsoft while it now plans to eliminate clone makers that expand the overall market for the Macintosh.

While the purchase of Power will deliver a short-term boost to Apple's revenues, it will inevitably lower total sales of Mac-compatible computers and hurt Mac application software developers. It's a strategic blunder by Apple, another in a long line of blunders by the company.

Some of the Power's employees will join Apple to help jump-start a direct sales business. It's rumoured Apple will start selling low-end Macs on the Web, possibly as early as October. What's left of Power Computing will concentrate on making Windows PCs, based on Intel chips.

Mac OS licensing difficulties prompted another alliance member, Motorola, to announce it will discontinue its line of Macintosh clones by the end of the year.

What's happening to those faster chips? During the keynote at January's MacWorld in San Francisco, Apple demonstrated a prototype PC running on a specially tuned PowerPC chip designed by Exponential Technologies. Machines running at up to 500 MHz using this technology were expected by this summer.

After all the hype about the speed, Apple declined to order the fast chip. With no order, Exponential went out of business this spring.

While both Motorola and IBM have said they will continue to make PowerPC processors, I'm skeptical about the chip's future prospects. With only one major customer, there aren't the resources to justify a major investment in research and development to improve the chip. I predict Apple Computer will eventually switch to Intel processors, possibly as early as the end of 1998.

PowerPC Alliance, R.I.P. CW