AHEAD OF THE CURVE: Motorola's savvy spin-off

  • Tom Yager (InfoWorld)
  • 20 October, 2004 11:18

During the last recession, few suffered as much as Motorola. After layoffs and other painful cuts, many expected the company to sell or shut down its semiconductor business. But Motorola chose a smoother path, spinning off its semiconductors as a separate company called Freescale Semiconductor.

Launching Freescale was the smartest move Motorola has made in years. Although it is entrenched in the embedded-component and device markets, analysts often gauged the company by its performance in the more glamorous server and desktop CPU space. There, Motorola's fortunes seemed to be waning fast. Its PowerPC line-up, along with retaining pop-culture hero Apple Computer as a customer, kept the chipmaker on the map. Motorola supplied the CPUs for Apple's entire G4 product line.

But its image suffered when Apple and IBM went public with their partnership on the 64-bit PowerPC 970. Apple grabbed the 64-bit processor and dubbed it the G5.

There are two ways to interpret Apple's chosen name. Either G4 and G5 are meant to live together or G5 is meant to make G4 obsolete. G5 is already replacing G4 in Apple's product line. Xserve and Power Mac are exclusively G5's domain, and Apple surprised the market with a G5-based iMac desktop. Observers are waiting for Apple to take that crucial next step with its PowerBook notebook line. Will Apple go with Freescale again, or will it parlay the cooling and power efficiency lessons learned from iMac G5's design and start cranking out 64-bit notebooks?

Who cares? Let's get some perspective. If Apple dropped Freescale, it wouldn't do in the chipmaker, nor would it mark the end of Motorola's legacy of PowerPC processors. To lose Apple would only push Freescale off the radar of IT publications because, even with as little coverage as Apple scores in the "serious" media, Apple is still a first-tier system maker. Freescale will do very nicely with or without Apple. Nevertheless, Apple's shift to IBM as a sole supplier shouldn't be taken for granted.

Motorola's spin-off has a license to the same Power processor technology that IBM uses to make Apple's G5. But Freescale doesn't have to clone the G5 to be successful. It has chosen its own wise path. Its next major product will be the MPC8641D dual-core PowerPC CPU. It is a 32-bit chip, but with some mind-blowing attributes. Freescale's chip will have two tightly linked PowerPC processors on one die.

Freescale's dual-core PowerPC may not grab the same headlines as IBM with its 64-bit chip and its shiny new facility in East Fishkill, NY, but I predict that the MPC8641D will land on some front pages. If I were Apple, I'd be thinking hard right now. Is the correct next move for PowerBook to leap straight to a single G5, or would users rather have two fast, power-efficient 32-bit PowerPCs for the price of one? Apple's decision matters.