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8/26/2005
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Freescale To Supply Apple With PowerPC Processors To '08

The agreement could be a sign that the transition to Intel chips may take longer than expected, or simply that Apple wants PowerPC processors available as insurance just in case.

SAN FRANCISCO — Apple Computer Inc.'s transition to Intel Corp.'s microprocessors may not happen as fast as expected, as the computer maker on Friday (Aug. 26) reported that it has signed a microprocessor supply agreement with Freescale Semiconductor Inc. that lasts through 2008.

According to a document filed by Apple with the U.S. Securities and Exchange Commission, Apple and Freescale entered into a purchase agreement Aug. 22 whereby Freescale is obligated to supply Apple with Power PC microprocessors through 2008.

Apple, however, is "under no obligation to purchase Freescale microprocessors other than work in progress that was in place at the time the agreement was executed," according to the filing.

Apple made waves in June when the company announced that it would start using x86-based microprocessors from Intel in its Macintosh computers beginning next year. Apple has been using PowerPC microprocessors in Macintosh since the mid-1990s, and has never before used Intel microprocessors.

In the June announcement, Apple said x86 microprocessors would permeate the entire Macintosh product line by the end of 2007.

This week's agreement with Freescale could be taken as a sign that the transition to Intel chips may take longer than expected, or simply that Apple wants PowerPC processors available as insurance against the possibility that the transition doesn't go as smoothly as hoped.

Apple's June announcement that it would transition to Intel microprocessors proclaimed a split between the company and IBM, which has been a longtime supplier of PowerPC microprocessors to Apple, along with Freescale (previously Motorola Semiconductor). IBM has reportedly experienced an assortment of delays and supply problems for the PowerPC to Apple.

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