The Coming 'Macintel' Revolution
Topic Strategic and Marketing Planning
Key Words Partnerships, strategic alliance, environmental scanning
InfoTrac Reference A133228991
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News Story 

Mac fans were caught off guard recently when Apple CEO Steve Jobs announced that Intel Corp. is now the new supplier of microprocessors to Apple, a move that ended the iPod-maker's 14-year relationship with IBM. Jobs had once derided the Windows-Intel empire, but emerging trends in computing--especially trends related to handheld devices and computer games--made Apple's strategic partnership with Intel nearly inevitable.

By creating an alliance with Intel, Jobs has opened a range of tantalizing new options for his company. The decision to put "Intel inside" ensures Apple's expansion into the market of popular notebook PCs. Additionally, Intel processors will put the vast library of Windows-based games and software programs within the reach of Mac users--an important development given Jobs' desire to challenge Microsoft and Sony's dominance in the in the digital entertainment category. And Intel benefits as well: For its part, Intel needs the partnership to enter the world of game boxes and portable devices like Apple's iPod.

According to reports, IBM's falling out with Apple was unavoidable. Jobs claimed that Big Blue had failed to meet promised performance measures, and Apple was practically forced to switch to Intel when IBM executives were unwilling to design faster, lower-power chips needed for Apple's laptop business.

In the long run, the new alliance enables both partners to keep up with competitors like IBM, Sony, and Microsoft. From that perspective, the alliance appears to be a necessary move. Yet for a maverick company like Apple that has long challenged consumers to "Think Different," the coming Macintel revolution seems uncharacteristically utilitarian--if not a sell-out. So long as the Intel partnership keeps Apple strong, diehard Mac fans will likely overlook the iPod-maker's pragmatic pact with the Dark Side.

Questions
1.

What are strategic alliances, and why is it necessary for businesses to form these alliances with other companies?

Source David Kirkpatrick, "Intel wins a date with Steve Jobs," Fortune, June 27, 2005 v151 i13 p30.
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