Why Mac OS for Pentium but not Itanium? Seriously.
Some thoughts on the economics of personal computers
Sunday, June 19, 2005 by Leauki | Discussion:
Had Intel suceeded in establishing Itanium on the desktop, as they originally planned, Itanium chips would probably be cheaper than they are now.
Of course, once the chip is established as the new standard, like x86 before, the price would have gone up, since users need the chip as much as the operating system. The result would have been a monopoly of standard microchips compatible with the Intel Itanium just as there is a monopoly of standard operating systems that are fully compatible with Microsoft Windows. Patents and copyright guarantee the monopoly, just as it was intended.
Microsoft, of course, knew about that danger. It is in Microsoft's (and every operating system vendor's) best interest for processors to be commodities (aka cheap and interchangeable). Thus Microsoft made a few moves to make sure Intel and HP could not succeed (while still supporting the Itanium chip as promised).
Microsoft knew about this danger in the late 90s and acted accordingly:
1. Keep everybody 32 bit until the arrival of a commodity 64 bit architecture.
2. Support Apple with Mac OS applications to keep other processor architectures around.
3. Move Xbox to PowerPC.
4. Support the commodity 64 bit architecture when it appears.
Intel also knew and were thus working to make operating systems the commodity.
1. Start and support a Linux-port to Itanium.
2. Try and convince software vendors to port operating systems to Itanium (including AIX).
3. Get HP to port HP-UX and VMS to Itanium.
4. Get Microsoft to offer Windows for Itanium.
The perfect situation for Microsoft is many competing vendors for all products that complement Windows: application software, games, utlities, hardware including graphic cards, microprocessors etc..
Thus Intel and AMD (and Cyrix and Transmeta etc.) producing what is understood as a commodity chip is what Microsoft want. But Intel alone offering the new standard chip without competition, that is as bad for Microsoft as Microsoft's monopoly (again, in the market for fully Windows-compatible operating systems) is for everybody else.
Note that this "everybody else" is makers of computer components (including software), not customers. Customers already pay as much as they will for a computer and this pricepoint is not affected by exactly which component of the computer is a commodity and which is not. An Itanium-based computer with Windows would, in the long run, cost as much as a Windows computer using a commodity CPU, namely as much as customers will pay for the entire solution. The only difference is the percentages of the money Microsoft and Intel or other chip makers receive.
If the processor is a commodity, Microsoft's percentage will be higher. If the processor is not a commodity (say an Itanium standard which only Intel can supply products for), Microsoft's percentage will be lower by exactly the amount Intel have gained.
Customers directly profit from commodity components when every single required component is a commodity. If the operating system as well as all the hardware is a commodity, prices for the entire system will fall, because none of the suppliers has a monopoly on anything and thus none of the suppliers would be in the position to earn the difference between cost of production (the price of a commodity) and what customers are willing to pay (which can be a lot more). The amount paid in excess of what commodity components would cost is what economists refer to as "rent". In this case the rent is a "monopoly rent" since it exists due to a monopoly power. This is similar to the reason for why an apartment in a nice neighborhood costs more than the same apartment in a bad neighborhood, in case you have ever wondered.
There are degrees between the two extremes. For example the operating system could be replaced by something that is not exactly the same thing but sufficiently like it. This would bring the price of the operating system down, i.e. commoditize it a bit. Linux has that effect. OS/2 did. Novell DOS did.
Sometimes no operating system at all can replace Windows. The customers in question don't need it and replace it with anything. In that case the operating system becomes a commodity, and I think one might notice that in these cases a computer with Windows and without Windows will cost the same, because the pricepoint is not affected by the exchange.
Think "Corn Flakes with Milk".
If both Corn Flakes and Milk are commodities, "Corn Flakes with Milk" will cost as much as it costs to produce them, say the amount C+M, with "C" being the cost to produce Corn Flakes and "M" being the cost to produce Milk.
If both Corn Flakes and Milk are produced by only one source, "Corn Flakes with Milk" will cost X, with "X" being the maximum amount customers are willing to pay for "Corn Flakes with Milk". This is the "pricepoint" referred to above and in extreme cases (if there is absolutely no other food at all) it will be infinite. [0]
If Corn Flakes are a commodity and Milk is produced by only one source, the product "Corn Flakes with Milk" will also cost X, with one of the Corn Flakes makers making C and the Milk maker making X-C (which is more than M).
If Corn Flakes are produced by only one source and Milk is a commodity, the product "Corn Flakes with Milk" will again cost X, with one of the Milk makers making M and the Corn Flakes maker making X-M (which is more than C).
If Corn Flakes are produced by only one source and Milk is a commodity and Corn Flakes can be replaced by something that is not quite the same as Corn Flakes but a somewhat acceptable replacement, say Rice Flakes, which are produced by only one source, the product "Rice Flakes with Milk" will make Y, for which we know is true: YM and the Rice Flakes maker will make Y-M and M will be, as above, the cost of producing the Milk.
And if a customer only wants Milk and doesn't care about Corn Flakes, even if only one source produces Corn Flakes, the customer will pay for "Corn Flakes with Milk" the same amount he would pay for just Milk, whatever that costs. Thus, for this customer, Corn Flakes would be a part of the commodity "some product I don't need", which is, of course, the ultimate commodity (the price is below even production costs at zero).
Thus Intel's Itanium chip would have cost less than what a PC costs but the price of it would have been a greater percentage of the price of a PC than Intel's chip is today.
And Microsoft certainly did not want that.
Thus Itanium now competes against SPARC and POWER in the server market where CPUs are expensive and operating systems tend to be commodities.
And that is, simply put, why Mac OS was ported to Intel x86 but not to Intel's IA-64 architecture.
Microsoft did not want it to happen. And Apple must see it the same way.
[0] This is not quite true, or at least it is possibly not quite true. The monopolist might not be able to sell anything if the price is too high because all customers wait for the price to fall and nobody wants to be the first buyer. The price will eventually fall because the monopolist can make a greater profit by selling to more customers. In order to sell to more customers the monopolist has to offer the product for a price more customers can afford. Customers can know that and thus don't want to be the first buyer. And the cycle repeats.
Of course, once the chip is established as the new standard, like x86 before, the price would have gone up, since users need the chip as much as the operating system. The result would have been a monopoly of standard microchips compatible with the Intel Itanium just as there is a monopoly of standard operating systems that are fully compatible with Microsoft Windows. Patents and copyright guarantee the monopoly, just as it was intended.
Microsoft, of course, knew about that danger. It is in Microsoft's (and every operating system vendor's) best interest for processors to be commodities (aka cheap and interchangeable). Thus Microsoft made a few moves to make sure Intel and HP could not succeed (while still supporting the Itanium chip as promised).
Microsoft knew about this danger in the late 90s and acted accordingly:
1. Keep everybody 32 bit until the arrival of a commodity 64 bit architecture.
2. Support Apple with Mac OS applications to keep other processor architectures around.
3. Move Xbox to PowerPC.
4. Support the commodity 64 bit architecture when it appears.
Intel also knew and were thus working to make operating systems the commodity.
1. Start and support a Linux-port to Itanium.
2. Try and convince software vendors to port operating systems to Itanium (including AIX).
3. Get HP to port HP-UX and VMS to Itanium.
4. Get Microsoft to offer Windows for Itanium.
The perfect situation for Microsoft is many competing vendors for all products that complement Windows: application software, games, utlities, hardware including graphic cards, microprocessors etc..
Thus Intel and AMD (and Cyrix and Transmeta etc.) producing what is understood as a commodity chip is what Microsoft want. But Intel alone offering the new standard chip without competition, that is as bad for Microsoft as Microsoft's monopoly (again, in the market for fully Windows-compatible operating systems) is for everybody else.
Note that this "everybody else" is makers of computer components (including software), not customers. Customers already pay as much as they will for a computer and this pricepoint is not affected by exactly which component of the computer is a commodity and which is not. An Itanium-based computer with Windows would, in the long run, cost as much as a Windows computer using a commodity CPU, namely as much as customers will pay for the entire solution. The only difference is the percentages of the money Microsoft and Intel or other chip makers receive.
If the processor is a commodity, Microsoft's percentage will be higher. If the processor is not a commodity (say an Itanium standard which only Intel can supply products for), Microsoft's percentage will be lower by exactly the amount Intel have gained.
Customers directly profit from commodity components when every single required component is a commodity. If the operating system as well as all the hardware is a commodity, prices for the entire system will fall, because none of the suppliers has a monopoly on anything and thus none of the suppliers would be in the position to earn the difference between cost of production (the price of a commodity) and what customers are willing to pay (which can be a lot more). The amount paid in excess of what commodity components would cost is what economists refer to as "rent". In this case the rent is a "monopoly rent" since it exists due to a monopoly power. This is similar to the reason for why an apartment in a nice neighborhood costs more than the same apartment in a bad neighborhood, in case you have ever wondered.
There are degrees between the two extremes. For example the operating system could be replaced by something that is not exactly the same thing but sufficiently like it. This would bring the price of the operating system down, i.e. commoditize it a bit. Linux has that effect. OS/2 did. Novell DOS did.
Sometimes no operating system at all can replace Windows. The customers in question don't need it and replace it with anything. In that case the operating system becomes a commodity, and I think one might notice that in these cases a computer with Windows and without Windows will cost the same, because the pricepoint is not affected by the exchange.
Think "Corn Flakes with Milk".
If both Corn Flakes and Milk are commodities, "Corn Flakes with Milk" will cost as much as it costs to produce them, say the amount C+M, with "C" being the cost to produce Corn Flakes and "M" being the cost to produce Milk.
If both Corn Flakes and Milk are produced by only one source, "Corn Flakes with Milk" will cost X, with "X" being the maximum amount customers are willing to pay for "Corn Flakes with Milk". This is the "pricepoint" referred to above and in extreme cases (if there is absolutely no other food at all) it will be infinite. [0]
If Corn Flakes are a commodity and Milk is produced by only one source, the product "Corn Flakes with Milk" will also cost X, with one of the Corn Flakes makers making C and the Milk maker making X-C (which is more than M).
If Corn Flakes are produced by only one source and Milk is a commodity, the product "Corn Flakes with Milk" will again cost X, with one of the Milk makers making M and the Corn Flakes maker making X-M (which is more than C).
If Corn Flakes are produced by only one source and Milk is a commodity and Corn Flakes can be replaced by something that is not quite the same as Corn Flakes but a somewhat acceptable replacement, say Rice Flakes, which are produced by only one source, the product "Rice Flakes with Milk" will make Y, for which we know is true: Y
And if a customer only wants Milk and doesn't care about Corn Flakes, even if only one source produces Corn Flakes, the customer will pay for "Corn Flakes with Milk" the same amount he would pay for just Milk, whatever that costs. Thus, for this customer, Corn Flakes would be a part of the commodity "some product I don't need", which is, of course, the ultimate commodity (the price is below even production costs at zero).
Thus Intel's Itanium chip would have cost less than what a PC costs but the price of it would have been a greater percentage of the price of a PC than Intel's chip is today.
And Microsoft certainly did not want that.
Thus Itanium now competes against SPARC and POWER in the server market where CPUs are expensive and operating systems tend to be commodities.
And that is, simply put, why Mac OS was ported to Intel x86 but not to Intel's IA-64 architecture.
Microsoft did not want it to happen. And Apple must see it the same way.
[0] This is not quite true, or at least it is possibly not quite true. The monopolist might not be able to sell anything if the price is too high because all customers wait for the price to fall and nobody wants to be the first buyer. The price will eventually fall because the monopolist can make a greater profit by selling to more customers. In order to sell to more customers the monopolist has to offer the product for a price more customers can afford. Customers can know that and thus don't want to be the first buyer. And the cycle repeats.
 |
|
Page 1 of 3 | |
|
|---|
Eroticus Prime
Reply #2 Monday, June 20, 2005 2:35 AM
Wrong, the dev 'transition' machines Apple are selling now are P4 3.6GHz machines.
Reply #2 Monday, June 20, 2005 2:35 AM
| Mac OS X HASN'T been ported to x86 |
Wrong, the dev 'transition' machines Apple are selling now are P4 3.6GHz machines.
Leauki
Reply #3 Monday, June 20, 2005 5:57 AM
Reply #3 Monday, June 20, 2005 5:57 AM
"The Intel chips that will be used in the new Macs will not be x86 based."
Where did you pick that up? Apple's developer documentation refers to x86 and the binaries created by Apple's developer tools are, according to "file" x86 binaries.
Where did you pick that up? Apple's developer documentation refers to x86 and the binaries created by Apple's developer tools are, according to "file" x86 binaries.
Doomgaze
Reply #4 Monday, June 20, 2005 6:51 AM
Then why has every build had an internal x86 build ACCORDING TO APPLE?
Ever heard of Darwin?
What is Darwin based off of kona?
I see foot in mouth remains.
Also as Eroticus Prime said, p4 dev machines.
Reply #4 Monday, June 20, 2005 6:51 AM
| Mac OS X HASN'T been ported to x86 - and never will be according to Apple. |
Then why has every build had an internal x86 build ACCORDING TO APPLE?
Ever heard of Darwin?
What is Darwin based off of kona?
I see foot in mouth remains.
Also as Eroticus Prime said, p4 dev machines.
Zoomba
Reply #5 Monday, June 20, 2005 7:23 AM
Reply #5 Monday, June 20, 2005 7:23 AM
The Intel Mac boxes will almost definitely be 100% standard PCs. Speculation is that Apple will control the machines OS X can be installed on by using Intel's new DRM chip technology. Look at the Mac of today... PC RAM, PC video cards, PC hard drives... The difference between a PC and a Mac at the hardware level has been shrinking steadily for a long time.
OS X has been in parallel development on x86 systems for 5 years now. Darwin is OS X without the pretty interface, and Darwin runs on x86 systems.
Kona, you really need to be a bit more informed before you go spouting off like that... Apple isn't going to allow OS X on any PC, it'll allow it on very very specific ones by using DRM tech from Intel. Retailers like Dell and HP *might* become resellers/builders of xMacs but you'll never be able to grab an OS X CD and just drop it on the spare PC made up of random parts you have in your basement.
OS X has been in parallel development on x86 systems for 5 years now. Darwin is OS X without the pretty interface, and Darwin runs on x86 systems.
Kona, you really need to be a bit more informed before you go spouting off like that... Apple isn't going to allow OS X on any PC, it'll allow it on very very specific ones by using DRM tech from Intel. Retailers like Dell and HP *might* become resellers/builders of xMacs but you'll never be able to grab an OS X CD and just drop it on the spare PC made up of random parts you have in your basement.
Leauki
Reply #6 Monday, June 20, 2005 7:40 AM
Reply #6 Monday, June 20, 2005 7:40 AM
"The Intel Mac boxes will almost definitely be 100% standard PCs."
The one thing we know so far is that they won't Apparently they'll use the same firmware as Intel's Itanium boxen.
OS X has been available for x86 in the late 90s. That was before the five years of parallel development.
Note that since OS X's base system is open source there is no technical reason for why OS X would not run on any PC, just as the PowerPC version can be installed on many non-Apple machines. Digital Restriction Management cannot prevent it.
The one thing we know so far is that they won't Apparently they'll use the same firmware as Intel's Itanium boxen.
OS X has been available for x86 in the late 90s. That was before the five years of parallel development.
Note that since OS X's base system is open source there is no technical reason for why OS X would not run on any PC, just as the PowerPC version can be installed on many non-Apple machines. Digital Restriction Management cannot prevent it.
kona0197
Reply #7 Monday, June 20, 2005 10:30 AM
Reply #7 Monday, June 20, 2005 10:30 AM
Well I'll come up with a good rebutal later. In the meantime all I can say is the move to Intel chips is a very bad move for Apple.
Leauki
Reply #8 Monday, June 20, 2005 3:11 PM
Reply #8 Monday, June 20, 2005 3:11 PM
"Well I'll come up with a good rebutal later. In the meantime all I can say is the move to Intel chips is a very bad move for Apple."
I disagree with the statement. But I am eager to hear the rebuttal.
I disagree with the statement. But I am eager to hear the rebuttal.
Doomgaze
Reply #9 Tuesday, June 21, 2005 8:14 AM
Why? Because it'll open Apple's market to the REAL market?
I know, its horrible.
Reply #9 Tuesday, June 21, 2005 8:14 AM
| In the meantime all I can say is the move to Intel chips is a very bad move for Apple. |
Why? Because it'll open Apple's market to the REAL market?
I know, its horrible.
Zoomba
Reply #10 Tuesday, June 21, 2005 8:45 AM
Reply #10 Tuesday, June 21, 2005 8:45 AM
The shift to intel represents no such change in market. Apple will still maintain high profit margins on hardware sales, you'll still only be able to buy Macs from Apple, you'll still only be able to install MacOS on a Macintosh, it's not going to usher in some new era of cross compatability with Windows.
The switch is interesting from a technological standpoint, but for the time being represents NO change to how you'll buy a Mac or how they'll perform. It'll be "Intel Inside" on the lower-end Macs. High-end will still be the PowerPC G# chips. In the short-term, the Powerbook line will get faster chips since IBM was never able to successfully shrink the G5 down enough or get it cool enough for the laptops.
I've read a ton of commentary and analysis on this whole shift to intel chips over the past few weeks. I've read all the "The Sky is Falling!" crap about how this is going to kill Apple/Linux/Microsoft/Whoever. Fact of the matter is, it doesn't change ANYTHING for anyone aside from the hardware and software engineers at Apple. XCode is being upgraded to compile "universal" binaries for both architectures, so even from the outside developer prespective it'll be fairly transparent.
The world is still round, Apple will remain a hardware company, this Intel shift means very little outside of cool tech issues... I wish people would look around and stop panicing.
The switch is interesting from a technological standpoint, but for the time being represents NO change to how you'll buy a Mac or how they'll perform. It'll be "Intel Inside" on the lower-end Macs. High-end will still be the PowerPC G# chips. In the short-term, the Powerbook line will get faster chips since IBM was never able to successfully shrink the G5 down enough or get it cool enough for the laptops.
I've read a ton of commentary and analysis on this whole shift to intel chips over the past few weeks. I've read all the "The Sky is Falling!" crap about how this is going to kill Apple/Linux/Microsoft/Whoever. Fact of the matter is, it doesn't change ANYTHING for anyone aside from the hardware and software engineers at Apple. XCode is being upgraded to compile "universal" binaries for both architectures, so even from the outside developer prespective it'll be fairly transparent.
The world is still round, Apple will remain a hardware company, this Intel shift means very little outside of cool tech issues... I wish people would look around and stop panicing.
kona0197
Reply #11 Tuesday, June 21, 2005 12:10 PM
I think it's a bad move because Apple could have went with a better and cheaper CPU maker - AMD. I don't see why they went with Intel. Everyone knows AMD chips perform better and cost less. If Apple had used AMD perhaps the price of a Apple PC would come down a bit.
Reply #11 Tuesday, June 21, 2005 12:10 PM
| Why? Because it'll open Apple's market to the REAL market? I know, its horrible. |
I think it's a bad move because Apple could have went with a better and cheaper CPU maker - AMD. I don't see why they went with Intel. Everyone knows AMD chips perform better and cost less. If Apple had used AMD perhaps the price of a Apple PC would come down a bit.
Zoomba
Reply #12 Tuesday, June 21, 2005 12:35 PM
Reply #12 Tuesday, June 21, 2005 12:35 PM
AMDs also run a lot hotter, which hurts laptop applications.
kona0197
Reply #13 Tuesday, June 21, 2005 2:51 PM
Reply #13 Tuesday, June 21, 2005 2:51 PM
I'll take more heat for better performance than an Intel chip any day of the week. 
JesseJ
Reply #14 Tuesday, June 21, 2005 4:09 PM
Reply #14 Tuesday, June 21, 2005 4:09 PM
I would take a little lower speed for better energy efficiency and a lot less heat. Intel is the better choice, and Apple's decision to use Intel over AMD to me says a lot about Intel's quality since Apple ony uses high quality components to build their computers with.
kona0197
Reply #15 Tuesday, June 21, 2005 4:15 PM
Reply #15 Tuesday, June 21, 2005 4:15 PM
Nice to see your still up to your old self Jesse. Less heat in Intel chips still isn't a good excuse to use CPUs that are inferior in performance to AMD chips. Not to mention cheaper.
JesseJ
Reply #16 Tuesday, June 21, 2005 4:17 PM
Reply #16 Tuesday, June 21, 2005 4:17 PM
If the Mac Mini had to use AMD, it would need a fan and that would be a step backwards considering that the current G4 Mac Minis have no fan.
kona0197
Reply #17 Tuesday, June 21, 2005 4:33 PM
Reply #17 Tuesday, June 21, 2005 4:33 PM
I settle for a fan in a Mac Mini - if the use of AMD chips made the price drop. And I know the AMD chip would be more powerful than the current G4 chip. 
JesseJ
Reply #18 Tuesday, June 21, 2005 4:36 PM
Reply #18 Tuesday, June 21, 2005 4:36 PM
I would rather pay more for higher quality then go with an inferior chip just because it's just a little bit faster and cheaper.
cal0140
Reply #19 Tuesday, June 21, 2005 4:55 PM
Reply #19 Tuesday, June 21, 2005 4:55 PM
kona, the topic of heat was introduced in the context of laptops, machines that inherently sacrifice performance for size. hence, having a laptop consistently run hotter will drastically reduce the life of the unit. i've got a gaming laptop, so i do require high performance, but at the cost of heat? i don't think so!
Island Dog
Reply #20 Tuesday, June 21, 2005 5:14 PM
Intel chips are not inferior to AMD chips.
Reply #20 Tuesday, June 21, 2005 5:14 PM
| Nice to see your still up to your old self Jesse. Less heat in Intel chips still isn't a good excuse to use CPUs that are inferior in performance to AMD chips. Not to mention cheaper. |
Intel chips are not inferior to AMD chips.
Please login to comment and/or vote for this skin.
Welcome Guest! Please take the time to register with us.
There are many great features available to you once you register, including:
- Richer content, access to many features that are disabled for guests like commenting on the forums and downloading skins.
- Access to a great community, with a massive database of many, many areas of interest.
- Access to contests & subscription offers like exclusive emails.
- It's simple, and FREE!
|
|
Page 1 of 3 | |
|
|---|
Reply #1 Monday, June 20, 2005 1:36 AM
Mac OS X HASN'T been ported to x86 - and never will be according to Apple. OS X will always run on Mac hardware. The Intel chips that will be used in the new Macs will not be x86 based.
I don't see why people are having a hard time with Apple's move to Intel chips - the ONLY thing that will change in a Mac will be the fact that the CPU will say "Intel" on it instead of "IBM".
Apple would lose to much money from hardware sales if they let OS X run on x86 machines.