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The Power PC Alliance: A Troubled Partnership Between Apple and IBM

Strategic Insights

— 2 min read

The alliance between Apple Computer and IBM, established three summers ago with the aim of conquering the dominance of Intel chips and Microsoft software, is showing signs of running off track. Despite Apple's sales of Power PC computers and IBM's expected introduction of its own version next month, the companies have wandered from their common mission of creating a unified Power PC platform that would run both Apple and IBM software interchangeably.

Key Takeaways:

  • The alliance between Apple and IBM is at risk of not fulfilling its promise of giving computer users a true alternative to the Intel-Microsoft standard, which accounts for 85 percent of personal computers now in use.
  • Analysts see an opportunity squandered, with George Colony, president of Forrester Research, stating that "this was the last hope to stop the Intel-Microsoft cartel, and it's not going to happen."
  • Apple has not yet disclosed whether it will include IBM among the computer makers allowed to license Apple's new System 7.5 software operating system for the Power PC.
  • IBM is placing new emphasis on its OS/2 operating system, which the company will spend up to $500 million to market and advertise.
  • The Power PC chips made by Motorola and IBM are finding a market not only in Apple and IBM machines, but also in other types of consumer electronics, such as video-game systems.
  • The two companies are so far apart that Taligent, the IBM-Apple joint venture created to develop a common software operating system, has yet to finish the software tools that third-party software developers will need to create applications for the Power PC.
  • The Power PC alliance is "brain dead," in the view of Stewart Alsop, editor of Infoworld, who believes that the companies are giving away control of the industry to Intel and Microsoft.

Statistics:

  • The Intel-Microsoft standard accounted for 85 percent of personal computers in use at the time of publication.
  • Apple is expected to sell one million Power PC Macintosh computers by the end of the year.
  • IBM plans to introduce an entirely new version of its OS/2 operating system next month.
  • The initial versions of the new OS/2 will work only with personal computers using Intel chips.
  • Within a year, IBM expects to have a Power PC version of OS/2 ready.
  • The Power PC chips made by Motorola and IBM will be used in other types of consumer electronics, such as video-game systems.

Sources:

  • International Data Corporation
  • Dataquest
  • Forrester Research
  • Infoworld
  • PC Week

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