Motorola quits Mac market; PowerPC fades

In what can only be described as an obvious move, given Apple's position toward the few remaining clone makers, Motorola has decided to pull out of the Mac clone market, and will take a $95 million charge this quarter to do so. Additionally, the Motorola Computer Group (MCG), responsible for the company's Mac clone designs, is expected to be dropped in a pending company reorganization.

Sadly, Apple's infighting with the clone makers may have more far-reaching ramifications than just this. Motorola, who, with IBM, makes the PowerPC microprocessor that powers all Macintosh computers, is targeting new chip designs at non-PC markets. This means that new, high-end CPUs needed for Apple Computer to remain viable will be slow to market. Despite years of hype and a RISC-based scalable architecture, the PowerPC has had virtually no impact on Intel, makers of microprocessors for Windows-based PCs. Now, Motorola is hoping to find a market they can effectively compete in. New PowerPC chips will be designed for larger markets, such as embedded systems and handheld PCs that run Windows CE, not for the Macintosh.

Adding further to the split-up: IBM is relinquishing its claim on the MacOS and will not license it further. Because Apple has violated the terms of its agreement with IBM and Motorola, IBM is looking to redefine its contractual agreement to supply Apple with CPUs. Though Motorola and IBM both manufacturer PowerPC chips right now, in the near future only IBM will be physically making the chips, though Motorola will still aid in the design. Right now, relations between Apple and IBM are tense.

Sensing the problems ahead, Apple is looking into other chips, including ones from Intel. In the meantime, Apple is refusing to buy the newest chips from Motorola or IBM unless they are discounted up to 50%. Since Apple is basically the only customer for these chips now, Motorola and IBM are left to reduce prices or not sell them at all. If this stance holds, the decision is clear: they will just stop making them. The market for new Macs is just not big enough to justify the research and development of PowerPC microprocessors anymore

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