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Apple may dump IBM, buy chips from Intel

SAN FRANCISCO -- A stormy, decade-long relationship between Apple Computer Inc. and IBM is over, according to published reports.

Apple chief executive Steve Jobs is expected to announce today at the company's software developers conference in San Francisco that Apple will discontinue using microprocessor chips made by IBM in favor of Intel chips, according to CNET Networks Inc.'s News.com and The Wall Street Journal.

Officials from Apple, Intel Corp. and International Business Machines Corp. could not be reached yesterday to confirm the report.

For years, rumors of Apple's wish to jump to Intel have been circulating. But two weeks ago, analysts were skeptical when The Wall Street Journal reported Intel and Apple were in negotiations. One reason for the skepticism is that the move represents a significant risk for Cupertino, Calif.-based Apple.

Switching to Intel's x86 chips would force Apple's programmers to rewrite its software in order to adapt to the new processor.

''I don't know that Apple's market share can survive another architecture shift," Insight 64 analyst Nathan Brookwood told News.com. ''Every time they do this, they lose more customers."

News.com reported that Apple would begin the transition to Intel with its lower-end computers, such as the Mac Mini, in mid-2006 and higher-end models a year later.

Apple's break with IBM stemmed from Jobs's wish that IBM make a larger variety of the PowerPC processors used in Macintosh systems. IBM balked because of concerns over the profitability of a low-volume business, News.com reported.

By wrestling away Apple's business from IBM, Intel tightens its stranglehold on the PC processor business. The company holds more than an 80 percent share of the market.

Although IBM suffers a setback with the loss of Apple, the company is expected to reap a financial windfall after signing up Microsoft, Nintendo, and Sony Corp. to use PowerPC technology in video-game machines.

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