With a sigh, one R&D manager who designs computer server CPUs referred to it as "the conversation" — the recurring water-cooler discussion about commodity economics and microprocessors.

It goes like this: A good-enough technology takes hold, grabs leading market share and rides an economic curve to the lowest costs, broadest software base, widest compatibility and market domination. Try as you may, any better technology is at best a niche, at worst a curiosity.

Last week's news that Apple Computer Inc. will adopt the X86 CPU for its Macintosh product line provided the latest evidence for that ongoing argument. With the announcement, desktop and notebook computing officially moved into a monoarchitectural world.

The same trend, to a lesser degree, continues to wreak havoc in the server arena, where Hewlett-Packard Co., IBM Corp. and Sun Microsystems Inc. stand among the few with an alternative architecture. Opinions are divided about whether cell phones or other devices are headed down a similar path, but there's no doubt the desktop just hit endgame.

Off the road map
Apple Computer's chief executive officer, Steve Jobs, said that the company will start shipping X86-based Macs by the summer of 2006 and will completely move the Mac product line to Intel Corp. CPUs by the end of 2007. The reason for the shift is unclear.

In a keynote address early this month at Apple's Worldwide Developer Conference, Jobs said the X86 road map leads to processors delivering 70 "performance units" per watt in the next few years, while the road map for the PowerPC — the Mac's longtime processor choice — will deliver only about 15. "We envision great products ahead and we don't know how to build them with the PowerPC road map," said Jobs.

That explanation doesn't fully wash, because the PowerPCs made by IBM and Freescale Semiconductor Inc. were typically custom-built variants and therefore not on a road map as such. It also does not address the question of costs.

Apple typically bought PowerPC chips for less than $65; X86 CPUs are likely to cost as much as twice that amount in round figures. It's possible, some industry watchers speculated, that IBM and Freescale may have refused to cave in to Jobs' aggressive price demands for CPUs that might have cost as much as $300 million to develop, forcing Apple into Intel's hands.

Others suggested the move to the X86 could save Apple money. The Cupertino, Calif., computer maker could essentially outsource to Intel its existing motherboard and chip set design work, freeing up internal engineering resources to work on its core operating system, in competition with Microsoft Windows, or on new consumer products to extend Apple's booming iPod line of MP3 players.

The real reasons for the Mac shift to the X86 may remain private for some time. In typical fashion, Apple and its current and former partners would not comment on the details of their relationships or on the news that shocked many and encouraged a few.

"The first thing that went through my mind was, 'I told you so,' " said Glenn Henry, who designed the precursor to the PowerPC at IBM, then left in the late 1980s over a controversial plan to develop X86 CPUs. "I wanted IBM to compete with Intel in the X86. It was politically unpopular and it became so politicized I finally quit." Henry now runs an 80-person X86 design group owned by Taiwan's Via Technologies Inc.

"The X86 will take over the world," Henry said. "They keep getting more software. That leads to more volume; that leads to more software — and more volume." The lack of such a cycle, he said, "has been Apple's problem. It's not technical, it's just the business reality."

The desktop consolidation is well under way in servers, he added. The SGI MIPS, Digital Equipment Alpha and HP PA-RISC chips are already gone or being phased out.

"It's basic economics and it's been happening for 10 years," Henry said. "The gap between a high-end X86 processor and its competitors will continue to narrow. My personal guess is the only [one] with the staying power, money and will is IBM with the Power architecture. That's the heart of their mainframe business."

Indeed, this year sales revenue from X86 servers is expected to exceed that of high-end RISC servers for the first time. IBM Power, Intel Itanium and Sun Sparc sales combined will decline to about 40 percent of server revenues over the next few years, said Martin Reynolds, a senior analyst at Gartner Dataquest.

Many observers say it's unclear whether a similar consolidation around, say, ARM-based processors will occur in the cellular world, given that handsets depend less on third-party software and more on carrier-specific services.

Videogame consoles march to a different drum. "Game developers typically switch architectures every generation," said Dan Bouvier, architecture manager for the PowerPC at Freescale.

It's this sector where IBM scored big with custom-chip deals with all three console makers — Microsoft, Nintendo and Sony. That group may ship well over a hundred million units of PowerPC-based consoles over the next five years, compared with probably less than 20 million Macs shipped by Apple over the same period.

For its part, Freescale will continue its focus on the highly fragmented embedded market for networking, telecom, automotive, storage and military systems. "We no longer design discrete microprocessors, it's all SoCs [systems-on-chip] now," said Bouvier.

He pointed to the upcoming 8641, a dual-core PowerPC G4 with integrated system logic and four Gigabit Ethernet media-access controllers. "This is a different sort of device than you would see in desktops," he said.

Counting costs
Apple's relatively low volumes of less than 4 million computers a year ultimately made the Mac an unattractive target for PowerPC chip makers. Estimated costs for developing a new high-performance processor range from a minimum of $50 million to as much as $300 million. "It runs a wide gamut," said Bouvier. Where it might take as few as 50 designers to do an ARM7-class chip, G4-class PowerPC designs might require 200 people, he said. Time-to-market and process technology requirements can also be huge cost adders.

"The number of companies that can design a performance MPU are dwindling," Bouvier said, quickly adding that Freescale is still very much in that league: Its E700 PowerPC-based core is in the works for an undisclosed launch date.

Apple was never one to look kindly on paying those costs, said Tom Gunter, who led the Motorola Inc. teams behind several generations of 68000 and PowerPC CPUs and personally negotiated several chip deals with Apple's Jobs.

"He wanted the 68000 for $20 at the time when we were selling them for $125, back in 1981," said Gunter, who retired a year ago, about the time Motorola's semiconductor sector was spun out as Freescale. "I put together a proposal that showed getting to $20 after the first million products.

"Steve always had a cost objective for any product he was building and he shared it with you quite aggressively. He expected you to meet it if not precisely, [then] at least in principle," said Gunter. "The magic number for the PowerPC was, first, to get it under $65. And then we started to talk about $50 and what would that part look like. To Motorola's credit, we decided to go after these elusive goals."

A 64-bit twist
In his keynote at Apple's developer conference, Jobs showed the current Tiger version of the company's OS X already running on an Intel computer, and said Intel-based Macs have been in the labs in some form for five years. New developer tools will help create so-called universal binaries that run on either a PowerPC or an X86. And software called Rosetta, reportedly using technology from Transitive Corp. (Los Gatos, Calif.), will let future X86-based Macs run existing PowerPC applications.

One wrinkle Jobs did not address was the shift to 64-bit code. Apple has been driving a move to 64-bit applications on the PowerPC. But it will likely have to use Intel's 32-bit Yonah, a next-generation mobile CPU, for its first X86 notebooks.

"I think what they are not telling people is they will have two transitions — one to 32-bit X86 and another to 64-bit X86 and, thus, three binaries to support," said Peter Glaskowsky, a system architect for startup MemoryLogix (Santa Clara, Calif.) and an analyst for the Envisioneering Group.

"This could amount to a half-step backward, but for notebooks it's not that big a deal," said Kevin Krewell, editor in chief of the Microprocessor Report. "However, it's something Apple is not talking about now because they don't want to scare off developers that will face a second transition."

Krewell said Apple's X86 shift marks a bold, bet-the-company strategy. Analyst Nathan Brookwood of Insight64 (Saratoga, Calif.) was skeptical Jobs will win that bet.

"I anticipate that when the dust settles on the PowerPC-to-X86 transition, Apple's market share will be lower than it is today, ending up somewhere between 1 and 1 1/2 percent," wrote Brookwood in a position paper. "At some point, even with Steve Jobs' awesome ability to attract attention for the company, Apple's declining market share will doom it to footnote status. At 2 percent [now], it doesn't have too much further to go in this regard."