Motorola Semiconductor Department buyout by Apple?

Discussion in 'Apple, Inc. Rumors' started by think_different, Mar 11, 2002.

  1. think_different macrumors newbie

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    #1
    This rumor of an IBM buyout by Apple was funny but completely silly. :rolleyes:
    But one thing that has been curious to me is that no one speaks of the possibility of the Motorola Semiconductor Department
    buyout by Apple.
    In the last months of 2001 I've read a few times that in the agreement between Apple and Motorola for the supply of the processors existed a clause that permitted Apple to buy that Moto department by the end of June or July of this year for $500 million.:cool:
    Does anyone knows anything about this? Is it true?
    Since almost everyone on this Apple rumors business think that all weaknesses and lack of power and speed that many claim to exist in several Apple's machines are clearly Motorola's fault, wouldn't it such a buyout make sense?:)
    That way Apple would, of course, control completely the processor development map and then, yes, it could have an absolute power over the development and hardware/software integration of Mac's.
    On the other way, Apple would have to build and support many processors, like the embedded line of processors, that Apple doesn't use and probably wouldn't like to continue to develop. Or, seeing it by another perspective, it would pave the way for many new products from Apple...PDA's, cameras, A/V products...who know's?;)
    What do you all think about this possible buyout?
     
  2. mac15 macrumors 68040

    mac15

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  3. think_different thread starter macrumors newbie

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    #3
    Mac15,

    If Apple has 4 billion in cash it seems to me that 500 million is cheap to get total technical and financial control of the processor production.
    That could guarantee the future of Aplle. That way they could improve in a faster production cicle the processor and motherboard and not be dependent of Moto and of Moto's other processor development interests.
    And don't forget that in 2001 Motorola thought several times of selling the semiconductor department because of all the financial dificulties. They even had to fire a lot of people!
     
  4. Catfish_Man macrumors 68030

    Catfish_Man

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    #4
    If...

    ...Apple gets complete control of the G4/G5 it could do several very cool things:

    1) Optimize it specifically for Macs
    2) Make it bigger, since it would no longer be an embedded chip
    3) have it produced by IBM or someone with competent fabs


    These could result in *ridiculously* fast chips. However, it would also cost a lot.
     
  5. MacAztec macrumors 68040

    MacAztec

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    #5
    Cool!

    Apple probly wont do it. They have been known to make choices that dont exactly HELP them. Ex. BeOS, Sony, IBM, all just a few deals they could of had, but they were just being stupid about it. If they merge and do this, I think we will see some serious speed in out macs!
     
  6. think_different thread starter macrumors newbie

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    #6
    Of course this buyout would be very cool.
    :)
    But more meaningful for me is to know if it is really true.
    Do you know if, in fact, exists such clause on the agreement between Apple and Motorola?
     
  7. ilikeiBook macrumors regular

    ilikeiBook

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    #7
    If Apple did buy Motorola's semiconductor department, they could figure out ways to make the G4/G5 fast(2Ghz?)!
     
  8. think_different thread starter macrumors newbie

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    #8
    Catfish_Man / ilikeiBook,

    We can only imagine the improvements and increments in speed Apple could do on the processor and boards with the total control of the R&D and production . Also we could see new gadgets made by Apple.
    Today Apple is a great client of Motorola, but not always the primary focus of attention.
    But, again the question, do you have any facts to confirm these rumors I've read?
     
  9. strider42 macrumors 65816

    strider42

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    #9
    Re: Motorola Semiconductor Department buyout by Apple?


    My understanding is that the agreement allows apple to buy out Motos interest in the AIM alliance and I suppose technologies that came from it, and thats it. Its certainly not the whole semiconductor department. it would basically just allow apple and moto to go their separate ways, which may also be a good thing for apple in the end, and would be a lot better then overburdening themselves with a whole department when they only need one small part of it.
     
  10. think_different thread starter macrumors newbie

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    #10
    Found some links

    Well, I've found some links for what I've said. The rumor apparently started with an article posted at MacOSRumors on June 27, and was referred in other places:

    -MacOSRumors ( original post )
    http://macosrumors.com/?view=archive/6-01

    -The Register
    http://www.theregister.co.uk/content/39/20038.html

    -Geek.com/ChipGeek
    http://www.geek.com/news/geeknews/2001july/bch20010702006614.htm

    -As the Apple Turns
    http://www.appleturns.com/scene/?id=3146

    I'll give you the most significant parts, to me, of that MacOSRumors article :

    "Third, Apple has invested 50 million dollars in developing a .10 micron lithography process for future PowerPC processors last year. Apple has also contributed a large amount of engineering staff to the project, and in fact, much of the design work on the G5 is being done in Building 2 of the Cupertino R&D campus, rather than at Motorola's Austin Texas facilities. This is the only reason the 733Mhz G4 was able to ship, and it was through much saber rattling on Steve Job's part with Motorola. This is in light of the fact that Motorola has been laggard in their Power PC commitment. Apple has the option in 2002 of buying the entire Power PC assets from motorola for $500 million."

    "Fifth, Apple has several contingency plans regarding future hardware, with IBM being the first solution. MacOSX has compiled successfully on three different RISC architectures of which I will not name. It has also been attempted on Intel processors, but it is very unstable because of the Intel architecture's legacy architecture, making them the most computationally ineffecient processors period. Apple will likely not pursue OSX on Intel for fear of the risk of cannibalizing its hardware sales, and from fear of retaliation from Microsoft."

    "Last, Apple is turning its focus to IBM to develop the G6 processor and beyond, of which Motorola has not yet committed to, and may not ever. IBM on the other hand has committed to using its most advanced technologies to future PowerPC generations."

    So, strider42, you were right, this is just about a buyout of Moto's assets on the AIM alliance.
     
  11. think_different thread starter macrumors newbie

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    #11
    As you saw I wasn't right about the possibility of a buyout of Moto's Semiconductor Department. My memory played me some tricks and after all the buyout would be about the assets of Motorola on the AIM alliance.

    But, still, that could be a very important move for Apple. Now tell me what do you think about that.

    -Would make sense that Apple assumes the responsability to design the PPC processors and rely on IBM, a taiwanese manufacturer or even Motorola itself to manufacture the processors?

    -Does Apple has, at this moment, the edge to design processors?

    -Would this conduce to a speedier design cicle of the processor and to more powerful and performant processors?

    -Is there anyone else out there that knows the terms of the AIM alliance that could confirm this rumor?
     
  12. think_different thread starter macrumors newbie

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    #12
    Red Hat to Support and Enable Linux Development for Motorola's Altivec-Enabled Host P

    See it at http://www.redhat.com/about/presscenter/2002/press_motorola.html

    What the hell is this?

    Red Hat entering the PPC world? For working in the embedded market I still understand since linux is starting to be popular in this area, but AltiVec? The AltiVec boost is interesting to normal computational area, not embedded computers.

    Or is Red Hat thinking in competing with Apple on the desktop area?

    Has Mac OS X managed to make such a good UNIX solution that started to spread fear in the linux community of loosing some UNIX market share?

    There couldn't exist better praise than that!
    :)
     
  13. think_different thread starter macrumors newbie

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    #13
    And that would be another good reason for Apple to buy Motorola assets in the AIM alliance and get total control of PPC processor design and production!!!;)
     
  14. MacAztec macrumors 68040

    MacAztec

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    #14
    Man...

    If apple bought that sector...we would have awesome machines. Apple would be making EVERY single part in their computer! The chip would be MADE for OS X, and would be MADE for the computer. I bet it would be awesome.
     
  15. think_different thread starter macrumors newbie

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    #15
    MacUser

    As you could see I was wrong on the presumption that such rumor that spread last year was of a buyout of the Moto department but no it was about the assets of Motorola in the AIM alliance.

    What really this could mean I still don't understand and that's why I ask the help of all the MacRumors community. If someone knew somethig on the terms of that alliance some light could be shed over the rumor and see the real interest for Apple to do it or no.

    But in 2001 Motorola was interested in selling the department due to the huge financial losses it gave. They fired a lot of people and are trying to maintain that department but if it contiunes to lose money it will not have another opportunity!

    Could than exist a way of an Apple buyout, probably helped by other part like IBM, or Sun, or who knows?

    Please help me to see the light over all of this!
     
  16. mcrain macrumors 68000

    mcrain

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    #16
    PPC

    Amiga is building a PPC based computer to run its OS4. TechTV had an interview with their CEO. There is info on it on Amiga's website. It's called the One, and the OS is supposed to run on PPC's, x86's, palms, and all sorts of other processors.
     
  17. mcrain macrumors 68000

    mcrain

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    #17
    One other thing

    If Apple buys moto's chip division, it will have to sell chips to its competitors that use PPC chips. (i.e. Amiga). If it does not, or does anything "anti-competitive" with Amiga, Apple will get sued for antitrust. I'm sure (I hope) Apple's attorney's are well aware of the potential minefield they will have to navigate.
     
  18. think_different thread starter macrumors newbie

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    #18
    Mcrain,

    Of course this somehow embarrassing possibility of Apple manufacturing PPC processors for many computer markets that Apple does not explore at the moment and even some direct competitors was one of the questions I left hanging for all of you to discuss.

    After all this is not so important because the real focus of that rumor was about an Apple buyout of Motorola assets on the AIM alliance and not of the semiconductor department ( yes, I was wrong with my first statement! ).

    But in the eventual scene of a buyout of that department by Apple and some other(s) company (ies) I don't know if Apple would be obliged to sell every kind of PPC processors produced to anyone that wanted them. Would this be a case for Apple being sued for antitrust? I really don't know...:eek:

    And Amiga being a threat to Apple? C'mon...:D

    But a buyout of that department by Apple and IBM would be cool...:)

    Probably that was the meaning of that recent rumor of an Apple buyout by IBM. It could be a very interesting cooperation : seeing the R&D departments of Apple and IBM working together and pushing really forward the PPC platform.

    And if Apple waked one day with so many different PPC processors, wouldn't it be a situation that could ease the development of several other goods with the Apple thinking and design : PDA's, cell phones, digital VCR's, A/V products...?:) :) :)
     
  19. alex_ant macrumors 68020

    alex_ant

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    #19
    The only company advancing the Power architecture today, and the PowerPC architecture that Power technology trickles down to, is IBM. Motorola is sitting on its duff thanks in part to the crappy economy and the fact that it is a company with its feet in several markets so huge the PowerPCs they sell to Apple are small beans.

    The notion that Apple should buy Motorola's PowerPC division is absolutely insane. Are you really in favor of Apple sacrificing its financial security in order to buy a faltering second-rate chip division with which it has no experience? The $500 million initial investment figure cited is just a drop in the bucket compared to the kind of investment Apple would have to make to be competitive with even IBM, not to mention Intel/AMD. Apple would have to deplete ALL its resources, and then some, in order to become a successful manufacturer of PowerPC-caliber microprocessors. Apple is simply nowhere near big enough to take on a responsibility like this. Thankfully they're also nowhere near stupid enough to have already tried.

    As for optimizing the chip for Apple software, etc.: This is pure dreamland. OS X is evidence enough that Apple cares little about software speed or efficiency. If Apple were interested in optimizing for speed, they would have gotten to the monumental task of tweaking their dog-slow OS years ago. Why engineer a chip "designed for OS X" when it would be ten times easier, less expensive, and more flexible to simply write a better compiler than the crappy barely-optimized GCC they use today?

    No company with less than $50 billion (probably more) in capital has ever successfully designed, manufactured, marketed, and profited from both the CPU and the computer they put the CPU in. Most of the big RISC CPUs are manufactured by the Asian mega electronics companies with mountains and mountains of cash and production capacity. Why are CPUs outsourced like this? Economics of scale.

    - Sun's SPARC: Designed but not manufactured by Sun.
    - DEC/Compaq's Alpha: Designed but not manufactured by DEC/Compaq. I believe Samsung is the big maker of these, or at least it used to be. I'm not sure what happened after the Alpha was sold to Intel, but that doesn't matter.
    - IBM's Power: Doesn't count because IBM is worth way more than $30bn.
    - MIPS (before being sold by SGI): Designed but not manufactured by MIPS. Samsung, LSI Logic, NEC, and I think Toshiba all made MIPS processors at one time or another, although I'm not sure who's up to it now.
    - HP's PA-RISC: Designed but not manufactured by HP.
    - Intel/AMD/Cyrix/NexGen/Transmeta/IDT/etc.: None of these companies made/make the whole widget.

    COULD Apple buy Motorola's PPC division? Sure. Could they profit off it? Not without charging about $3000 per chip. And then they wouldn't be profitable for long, would they?

    Alex
     
  20. Ensign Paris macrumors 68000

    Ensign Paris

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    #20
    I doub't this would happen but I really really hope it does, also, Apple would then supply the processor to the GamesCube and I think the PS2?

    Ensign
     
  21. Mr. Anderson Moderator emeritus

    Mr. Anderson

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    #21
    One of problems that seems to pop up now and again, is that Apple will always be at the mercy of its chip developer. I'm sure they'd love to have Motorola, but then what happens to IBM - G3? It might be better for now that the competition continues and Apple stays out of the chip making game.

    I'd just like to see faster upgrades.
     
  22. LethalWolfe macrumors G3

    LethalWolfe

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    #22
    I know I'm a relative Apple neophyte, but I'm inclined to agree w/alex_ant.

    When 3DFX was king of the 3D hill they decided to buyout a graphix board maker (I can't remember who off the top of my head) so they could control their cards from design thru production. What they quickly found out was they didn't know jack 'bout production. They quickly fell behind Nvidia in getting new cards to market and finally got bought out by Nvidia in late 2000. Hero to zero in a couple of years. Ask anyone who followed 3DFX and they'll tell you it all went down hill after they got into physical production of their cards.

    I'm not saying the same thing would happen to Apple, but...


    Lethal
     
  23. eirik macrumors regular

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    #23
    buying Moto Semi

    Apple alone buying Moto doesn't make sense. However, Apple buying Moto's intellectual property: AltiVec, SOI, etc., and some engineers, would be practical.

    But Moto is not likely to sell its intellectual capital alone. That is why Apple would need to partner with a large semi manufacturer who would buy the manufacturing assets.

    With such an arrangement Apple would have the freedom to outsource the actual manufacturing of CPU's that their designers come up with any fab they choose, perhaps multiple fabs.

    Thus, Apple would be in the same position as those firms that Alex_Ant referenced. It would have the flexibility of design priority combined with the ability to have manufacturing handled by someone else with proper economies of scale.

    Eirik
     

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