The landmark joint venture announced yesterday between International Business Machines Corp. and Apple Computer Inc. to develop a new generation of personal computer technology could fundamentally change the rules of the hotly competitive computer industry, analysts and industry officials say.
There was speculation that by joining together to create a common software that could operate either IBM or Apple computers, the two erstwhile rivals could undermine the dominant position of software giant Microsoft Corp. It also could have ramifications for Intel Corp., the longtime supplier of the computer chips used in IBM PCs.
And, by creating an advanced new technological standard that would be controlled by Apple and IBM but made available to other producers, the combination could deal a blow to a myriad of companies that have sprung up to produce "clones" of today's IBM PC, some said.
While the aim of the alliance is to consolidate -- and eventually to simplify -- the choices for computer users, experts say the short-term effect is likely to be more confusion as consumers are faced with a whole new array of options -- and uncertainties.
The deal's effect on Redmond, Wash.-based Microsoft was a prime topic of discussion throughout the computer industry yesterday. Microsoft officials did not return calls seeking comment on the deal.
Microsoft has deep, longstanding relationships with both IBM and Apple: It makes the MS-DOS operating software that controls the fundamental functions of most IBM PCs, and it is the leading supplier of word-processing and spreadsheet programs for the Apple Macintosh.
But the relationships have frayed in recent years. Microsoft and IBM have sparred over the refinement of the most recent versions of the IBM PC operating system. Apple has alleged in a lawsuit that Microsoft's popular Windows software for IBM PCs copies the "look and feel" of the Macintosh's easy-to-use graphically oriented operating system.
Microsoft has come under fire from other quarters as well. Its domination of the personal computer software industry has prompted an antitrust investigation by the Federal Trade Commission, and many officials in the computer business privately complain that Microsoft is just too big and too arrogant.
By banding together to develop an operating system that would replace DOS and IBM's current OS/2 as well as the current Macintosh system, IBM and Apple are mounting a frontal challenge to Microsoft's dominance.
IBM and Apple have not yet produced anything more tangible than a preliminary agreement to work together, analysts point out, and many in the computer industry believe the two companies' disparate corporate cultures, as well as the usual difficulties in writing highly complicated programs such as the planned common operating system, could saddle the new alliance with unforeseen delays and difficulty before it can bring a product to market -- something that is not expected until mid-decade in any case.
That may give Microsoft time to adjust and to cultivate its own attempt at a mutual operating system development project, the Advanced Computing Environment (ACE) venture, in which Microsoft is working with IBM clone-maker Compaq Computer Corp., computer maker Digital Equipment Corp. and others to develop a generation of operating systems that will work on different types of computers.
Analysts say that it is possible that in a few years computer buyers will be able to choose from operating systems made by the IBM-Apple alliance, the Microsoft-ACE team and perhaps others such as Sun Microsystems -- a significant change from the current environment, in which the choices basically are Microsoft for IBM PCs and their clones and the Macintosh operating system for Apple machines.
IBM's simultaneous alliance with Motorola Inc., for the development of what the companies describe as a "PowerPC" chip, could ultimately challenge Intel's domination of the computer chip business. While Motorola makes the 68000 series of chips used in the Macintosh, it has been unable to crack Intel's domination of the IBM PC world through Intel's series of 286-, 386- and 486-class chips.
Now, some analysts suggest that Motorola has gained an edge over Intel. There is potential for huge benefits if the "reduced instruction set computing" (RISC) chips that it will develop with IBM lead to a successful new line of "workstation" computers. "We think it's an extraordinary opportunity," said a Motorola spokesman.
But an Intel official was sanguine yesterday. "It doesn't affect our relationship with IBM at all," said a spokeswoman at the company's headquarters in Santa Clara, Calif., in the heart of Silicon Valley. "They like us, we like them, they have X86 processors, they put them in the PCs." She said that the huge number of existing Intel-based PCs -- 70 million in all, with 20 million added annually -- will provide continuing business for Intel.
In an ironic twist, the Apple-IBM deal could harm Apple co-founder Steven Jobs, whose new company Next Inc. is reportedly planning future computers around a Motorola RISC microprocessor chip. That chip has won few supporters thus far and the Apple-IBM alliance could further weaken its appeal and competitiveness. Jobs could not be reached for comment.
With so many variables still to be settled, experts yesterday were advising computer consumers against taking a wait-and-see attitude until the dust settles. It never really does settle in the fast-changing computer business, they noted. "If you're planning for the next year or two, you probably want to go ahead and buy what works," said industry analyst Esther Dyson.