POSTED: 31 DECEMBER 2005 - 3:30pm HST

The future of the computer in entertainment

2006: Intel Betting on Apple in Digital Convergence?
by Anthony Frausto-Robledo 30 December 2005 for

Recent rumblings on the West coast of Intel giving Apple preferrential treatment, much to the chagrin of veteran Intel PC partners, further aligns itself with views that Apple and Intel's partnership may just be much richer and complex than first imagined. In fact, the full nature of Apple's switch to Intel processors is not totally understood, leading many to speculate about what that relationship fully entails.

Back in June, when Jobs made the Intel Switch announcement, some noted that Intel recognizes that it is officially "out" of the game console market being that both Sony and Microsoft have firmly planted their feet into IBM PowerPC technology for their newest game machines, joining Nintendo. Both companies plan aggressive moves with marketing their game machines as pure 'living room' entertainment hubs -- capable of supporting digital music and video playback. However, Microsoft is also touting its Windows Media Center Edition 2005 product as a way of using the PC to do much of the same thing, yet without the success the company would like.

However, the critical question for Intel is: what happens if the XBox 360 and the PlayStation 3 ultimately win the convergence battle and the hearts and wallets of the living room? What happens if these game consoles dominate and Microsoft realizes that the Windows Media Center Edition digital-hub strategy is a lost cause? Will Microsoft care that Intel is left on the sidelines in the living room's digital future while it battles the mighty Sony with its XBox 360 franchise? Probably not.

This is a very real possibility. And Intel is aware of this.

The iPod and the mini
However, when it comes to media darlings these days 2005 was Apple's year. And the iPod was the center of that focus. Many believe that Apple has a home media hub and strategy up its sleeve (or is that Jobs' sleeve?). In fact, the latest Front Row software that ships with the newest iMac portends very favorably to that future. As does the nature and development path of iTunes and the iTunes Music Store.

With the huge threat of the game console market, coupled with the fact that the PC manufacturers have thus far failed to gain traction in the living room, it would be foolish for Intel not to want to hedge its bets on Apple having a shot at the living room as well. In fact, the prevailing wisdom is that Apple may have the best shot of all especially as the company is fast becoming a media powerhouse. Apple combines software expertise, web services technology and hardware genius in a potent customer experience that arguably no other company on the planet can rival. And Jobs' relationships to media companies like Disney doesn't hurt Apple either.

Intel or PowerPC?
Does Apple truly need Intel to implement a killer digital hub strategy? Despite what Jobs said in June, the answer is probably no. If Microsoft and Sony can go long on IBM and Power Architectures, then surely Apple can too. Apple is obviously interested in Intel for other reasons and growing Mac platform market share seems to be one of them. The two companies can seriously help each other.

Apple helps in providing Intel a serious way into the living room (just in case Intel's own strategies fail, and they probably will) and Intel helps in giving Apple a pathway to accelerated Mac platform growth. After all, if Macs now run on Intel chips, does Intel really care about the Windows versus Mac platform wars anymore? In fact, given the cold shoulder Microsoft gave them in choosing IBM for their XBox 360 chips, does Intel really care all that much about Microsoft?

In the year ahead we will see Apple step up the Front Row software media experience and that will be coupled with new and exciting hardware. In fact, we may see Apple introduce Front Row 2 on a new Intel-based iMac as early as January at Macworld Expo.

Apple has Intel is an interesting position. It is not clear whether or not Apple sees this developing in its favor. The two companies also have some interesting technology they can share uniquely with each other in a joint-effort battle for the living room. Intel bought Real 3D years ago and with that purchase some valuable patents in 3d. Apple at about the same time bought Raycer Graphics and its patent portfolio, the fruits of which Apple users have not had the privilege to see. Could Raycer Graphics' technology be involved in some Apple media hub that supported gaming? Possibly but not likely.

What is likely is that Apple and Intel engineers are jointly working on new motherboards (the subject of recent speculation) with a particular focus on an unique architecture for Apple.

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