Apple and IBM Shares Surge on Common Standard Progress and Power PC Microprocessor Updates

Strategic Insights -

Shares in Apple Computer Inc. saw a significant rise of $1.875 to close at $38.875 in Nasdaq trading, while International Business Machines Corporation (IBM) shares climbed 37.5 cents to $71.50 on the New York Stock Exchange. This follows reports of progress toward a common standard between Apple and IBM, making each company's computers compatible with the other's, and updates on the Power PC microprocessor developed with Motorola Inc. The sharp rise in Apple's shares comes after a year of stability, with its stock trading as high as $39.625 during the day.

Key Takeaways:

  • Apple and IBM are making progress toward a common standard that would make each company's computers compatible with the other's.
  • IBM released new versions of the Power PC microprocessor developed with Apple and Motorola Inc., with a higher-performance chip priced at $549, compared to $525 to $900 for Intel's Pentium.
  • Apple's shares jumped $1.875 to close at $38.875 in Nasdaq trading, the highest close in a year, after initial speculation of Motorola acquiring Apple drove its stock up by $4.125 on Wednesday.
  • IBM reported that they continue to talk to Apple about a common platform, but there is nothing new to announce, according to Apple spokeswoman Betty Taylor.
  • Recent years have seen Apple in merger talks with IBM, Motorola, AT&T, and Novell, but there is no confirmation on any of these talks.
  • I.B.M. aims to give its customers a complete family of RISC microprocessors that deliver twice the performance of comparably priced CISC microprocessors, according to director of Power PC microprocessors, I.B.M. Microelectronics, Fred Sporck.
  • The new Power PC chip will enable I.B.M. machines and upcoming Motorola computers to run Unix operation system software, while only Apple's personal computer operating system will run natively on the Power PC, but Apple has been slow to license it.

Statistics:

  • Apple's shares rose by $1.875 to close at $38.875 in Nasdaq trading, its highest close in a year.
  • Apple's stock traded as high as $39.625 during the day.
  • IBM shares gained 37.5 cents to $71.50 on the New York Stock Exchange.
  • The new IBM Power PC chip is priced at $549 compared to $525 to $900 for Intel's Pentium.
  • The higher-performance Power PC chip is expected to deliver twice the performance of comparably priced CISC microprocessors, according to I.B.M.

Sources:

  • "The Wall Street Journal"
  • "The New York Times"
  • Datastream (for the graph "Heading for an Accord?")
  • Apple Computer Inc.
  • International Business Machines Corporation (IBM)
  • Motorola Inc.