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.

First Previous Page 2 of 3 Next Last
kona0197
Reply #21 Tuesday, June 21, 2005 5:20 PM
Intel chips are not inferior to AMD chips.


Wrong - current benchmark tests and various other tests say otherwise. Intel might not be making inferior chips but they aren't on par with what AMD is putting out.
JesseJ
Reply #22 Tuesday, June 21, 2005 7:01 PM
There is more to a good quality chip than speed. As far as I know, speed is the ony advantage AMD holds and the speed really isn't that much faster than Intel. Energy efficiency is also an important factor. So is the amount of heat a chip gives off. A chip that gives off less heat will mean less chance of a computer that dies out from over heating. Also I do not want to have to deal with noisey fans or having space taken up by those liquid cooling systems. The speed difference between Intel and AMD can't be that noticable if it takes benchmark tests to show the difference.
chinkler13
Reply #23 Tuesday, June 21, 2005 7:33 PM
Apple is moving to Intel chips mostly because of the fact Intel chips are so much more energy efficient than their projected PowerPC chips.

and based on what i hear, AMD is less efficient than Intel so...

that explains their decision
kona0197
Reply #24 Tuesday, June 21, 2005 7:49 PM
AMD chips are less efficient? I think not. Read up on this test of a P4 - AMD beats it in many of the tests.

http://www.theregister.co.uk/2005/05/26/review_pentium_d/
JesseJ
Reply #25 Tuesday, June 21, 2005 7:55 PM
Face it kona, not everyone wants to use your AMD chips, especially Apple.
Chris TH
Reply #26 Tuesday, June 21, 2005 9:05 PM
Read up on this test of a P4 - AMD beats it in many of the tests.


Don't forget who won the Betamax vs VHS debate. Technically better is not always what wins out in the marketplace.

Let's face it, something that gives you less heat for similar performance *is* compelling and could also be considered technically more advanced because of it.

I'm happy that you're happy with AMD. Leave the rest of us to wallow in our inferiority
Chris TH suspects Kona has shares in AMD
DesignCaddy
Reply #27 Tuesday, June 21, 2005 10:19 PM
"Apple is moving to Intel chips mostly because of the fact Intel chips are so much more energy efficient than their projected PowerPC chips."

incorrect.. apple is making the move because IBM can't keep up with demand.

what makes a mac a mac is the OS. the hardware has been the same in all machines for a long time - though, a mac has specifics where as a pc is (bloated)designed to work with many different hardwares.

i'm suprised to see them on the 3ghz chips instead of the cheaper 2 something ghz intel chips, tho. costy costy. i actualyl stunned one of my macvocate friends today, he made a crack about apple going to intel when hell froze over. i asked him if he's read the news lately.. he was.. suprised..
Eroticus Prime
Reply #28 Wednesday, June 22, 2005 2:16 AM
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.


I really didn't want to get involved in a stupid fanboy discussion, but AMD chips are neither low quality or inferior, and it's just stupid to suggest they are.
TexasJoe
Reply #29 Wednesday, June 22, 2005 5:32 AM
kona0197> howdy again! Happy to see you're sticking to your "x86-based but not x86" story!
About AMD vs Intel: if heat was no problem, I'd probably go for an AMD Athlon 64 that offers better value and better overall performance. But did you ever hear about the Centrino platform for laptops, in which the Pentium-M offers better performance, battery life, efficiency and more performance-per-watt (less heat for higher performance) than their AMD counterparts, Athlon-M or Turion. It's a known thing!
If this chip was clocked higher and used on a desktop motherboard, AMD's hogs would be so poor it'd take six of'em to make a shadow.
Doomgaze
Reply #30 Wednesday, June 22, 2005 7:18 AM
I think it's a bad move because Apple could have went with a better and cheaper CPU maker - AMD.



How do you know they're cheaper?
Intel could have offered them a deal AMD could have never matched.
Choosing Intel over AMD I'm sure was an executive decision not based on heat or speed.
Zoomba
Reply #31 Wednesday, June 22, 2005 7:40 AM
You have to look at what Apple tries to achieve with their hardware, then look at what AMD and Intel provide...

1. Apple wants an established business partner that can produce large quantities reliably. Intel has proven this time and again as they are the dominant brand in the market. AMD has not had a chance to really prove itself here

2. Apple has been trying for a while to get their laptops faster. The PowerPC chips used in the latest desktops (G5) were taking far too long to shrink down, get cooler and consume less power. Despite what YOU may feel about laptops, most people want a laptop that doesn't drink the battery and doesn't scorch their lap (the last is a common complaint about Powerbooks). AMD is known for speed at the expense of power and cooling effeciency. Intel has a line of chips specifically made for laptops that meets all the major needs and delivers solid speed.

3. DRM! Apple needs DRM tech on the chip to limit what hardware OS X can be installed on. Intel is including this on their newer chips. As far as I know, AMD has no such tech.

4. Performance is relative to the market. AMD chips may score higher on lab benchmarks, may perform better in high-end games or other power user applications, but the market Apple is targeting with the Intel Macs doesn't do much of anything that's all that taxing. Macs aren't gamer rigs, and if you're a serious multimedia person, you will stick with the PowerPC lines anyway. The average user is not going to notice the speed difference between a Pentium 3.0GHz and an AMD 3200+

5. Cost per chip is irrelevant to Apple. They have always charged way more than the equipment costs. They've admitted that they put massive profit margins on all hardware sales. So now they'll have a chip that costs a LOT less than the PowerPC, but more than an AMD... I bet the price won't change much, and if it does it'll go down a smidge. The end user wouldn't see the benefits of the small price difference between Intel and AMD (and the difference when buying in bulk is much smaller than when the average consumer buys).

AMD is the gamer/power user's chip. They're great chips too, don't get me wrong, but they don't bring much value to the table for Apple. There was pretty much NOTHING they could offer that Intel couldn't.
kona0197
Reply #32 Wednesday, June 22, 2005 5:42 PM
3. DRM! Apple needs DRM tech on the chip to limit what hardware OS X can be installed on. Intel is including this on their newer chips. As far as I know, AMD has no such tech.


DRM is an evil little monster. From what I've read it prevents the use of copying copyrighted material - and in the long run cracks down on P2P programs. It's a very good thing AMD isn't offering DRM in their chips. Someone please correct me if I'm wrong.
TexasJoe
Reply #33 Thursday, June 23, 2005 4:18 AM
From unconfirmed sources I read AMD would. I'm not sure the DRM Intel is implementing in its chips purports to enforce copyrights. At least not yet.
thedon808
Reply #34 Thursday, June 23, 2005 5:35 AM
Going way back to the first comment.
The Intel chips that will be used in the new Macs will not be x86 based.


Why would Intel make a brand new chip for apple? When it has one that will work just fine?

AMD's advantage is that its 64 bit chips are built from scratch with 64 bit and dual core in mind. Where as Intel have quickly added bits on to make 64 bit and dual core. But how long will it be before they build a brand new chip with designed with 64bit and dual core, from the mobile chip?



Darwin is OS X without the pretty interface, and Darwin runs on x86 systems.


OS X is a lot more that just a pretty interface otherwise why do people buy macs if they could just install Darwin x86 on any pc add KDE or Gnome and then just buy apple software saving themselves £1000 or so. OS X includes aqua the pretty gui and cocoa and carbon and more upon which the software runs thats make OS X differant to Darwin.
Zoomba
Reply #35 Thursday, June 23, 2005 7:49 AM
Darwin is the guts of OS X. Any version of MacOS can be broken down into two equally important parts... the innards of the system, and the user interface layer.

Aqua is part of the UI. So is Expose etc... The UI layer on a Mac is very complex and involved.

Plus, as much as people like KDE/GNOME etc... they don't even come close to the visual refinements, appearance and simple ease-of-use you find on the Mac. That is why you pay more for the Mac, because it's UNIX with a UI that is actually usable.
TexasJoe
Reply #36 Thursday, June 23, 2005 10:01 AM
But how long will it be before they build a brand new chip with designed with 64bit and dual core, from the mobile chip?


not sure what you mean. Intel will ship a revision of Yonah (part of Centrino 3 platform code named Napa) about the time Windows code named Longhorn ships. That's gonna be my next laptop. The processor will be dual-core, SSE3, 2MB shared L2 cache, 667 Mhz FSB...
Leauki
Reply #37 Saturday, July 2, 2005 4:01 PM
Some thoughts about Mac OS Intel and Mac OS PowerPC:

http://www.netneurotic.net/mac/intel/index.html

Underdog45
Reply #38 Wednesday, July 6, 2005 11:28 AM
The main reason Apple decided to move away from PowerPC chips is because they were not getting faster as quickly as Apple wanted them to go. The x86 architecture turned out to be better for Apple's speed desires. The reason they picked Intel is because AMD has had a history of supply problems.
Ka806
Reply #39 Saturday, July 9, 2005 11:09 AM
Darwin is the guts of OS X. Any version of MacOS can be broken down into two equally important parts... the innards of the system, and the user interface layer.

Aqua is part of the UI. So is Expose etc... The UI layer on a Mac is very complex and involved.

Plus, as much as people like KDE/GNOME etc... they don't even come close to the visual refinements, appearance and simple ease-of-use you find on the Mac. That is why you pay more for the Mac, because it's UNIX with a UI that is actually usable.


That is a fairly bold (and by bold I mean biased) thing to say.

To say that the gnome and kde DE are not usuable while the MAC OSX one is? That is one of the funniest things I have heard in a while. To push statements like they are fact makes it even funnier.

I really dont want to get into a war or anything, but I will tell you that I think Gnome/KDE BLOW AWAY MacOSX in terms of simplicity, customizability, and appearance. Plus I get things done faster on them too.

No Mac is not the "elites of elites" in the computing world. They are just like everyone else including windows and the various *nix styles. They got their disadvantages and advantages and cater to a specific group of people.

Heck MacOSX barely compares to some of the WM that are out today. (Not including enlightenment, which rapes MacOSX in terms of visual appearance)

Oh And I think the REAL main reason that APPLES switched to Intel x86 architecture was because they have been planning this thing for 5 years. Switching architectures is REAL hard. Doing it secretly and developing software which can improved compatibility between 2 hardware architectures is INSANELY hard and time consuming. 5 years ago, Intel and x86, was all their only viable option. Remeber that this is more of a business move then a techie one.

Acceptance of 64bit and even AMD is just starting to take off now. Given the chance, Apple may have considered athlon-64 or athlon-xp (or athlon-mac whatever) Or mabey even Itanium, or heck a brand new architecture. But it looks like APple wanted to make the switch, and they wanted to make the switch fast, secretly, and as seemless as possible.
Ka806
Reply #40 Saturday, July 9, 2005 11:16 AM
Darwin is OS X without the pretty interface,



Just no.

Read up about OS architecture before running your mouth.

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