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Motorola looks beyond Macs

Motorola's PowerPC chip group, which produces processors for Macintosh computers, will turn increasingly to making "embedded" processors, used in applications such as handheld devices and TV web browsers.

Motorola's (MOT) Semiconductor Products group, which is responsible for PowerPC processors, signaled it will shift its business increasingly away from computers and further toward non-PC markets.

Motorola announced a strategy that will emphasize the development and sales of "embedded" processors, as reported last week by CNET's NEWS.COM. Embedded processors are low-cost processors designed to consume small amounts of power and are used in applications such as Net phones, TV Web browsers, network computers, and set-top boxes for satellite and cable TV.

At the announcement, which took place at a company conference in Orlando, Florida, Motorola said it will expand its partnership with IBM to include the embedded processor market as a result of the strategy shift. Both companies jointly develop the PowerPC architecture at the Somerset Design Center in Austin, Texas, but manufacture PowerPC processors separately for Macintosh computers.

As part of a new Motorola embedded push, the company announced the M-Core architecture, which delivers high performance in a low-cost, low-power package, Motorola said.

The move may underscore Motorola's expectation of a shrinking demand for Mac merger PowerPC processors after Apple Computer's purchase of Power Computing's Mac clone operations, which is aimed at shutting down competition from cloners.

"There are oodles and oodles of [applications] outside the PC," a Motorola spokesperson said today. He added that there is still a lot of life left for the PowerPC in "non-PC" areas.

Motorola, along with IBM, makes PowerPC processors for the Macintosh and Mac-compatible computers. But some analysts have wondered how long two large companies could continue to focus their efforts on a relatively small processor market. While primarily one company, Intel, supplies a market that consumes close to 100 million processors a year, IBM and Motorola compete to supply roughly 5 million chips annually to the Mac segment.

Motorola in particular has been increasingly active in the non-PC market, making PowerPC microcontrollers. Such chips, typically less complex than the microprocessors found in computers, are used in cellular phones, automobiles, and a variety of other products.

Recent reports have also stated that Steve Jobs, who is now Apple's de facto leader, is considering an Intel-based network computer and Intel-based servers, which could eat into PowerPC sales.

The move will be the latest development in a complete overhaul of the Macintosh market this week, which began with the Power Computing sale. With that deal, Apple has effectively halted the licensing program where it thinks that the Macintosh market isn't being expanded.

Motorola has had to suspend the release of its StarMax 6000 computer line, a long-awaited series based on a new architecture called CHRP, because of a Apple's hard-line stance on licensing of the Mac OS 8 operating system. Some observers have speculated that the cancellation might mean that the Motorola Computer Group is getting out of the clone market altogether.