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Tuesday, October 12, 2004

MOTOROLA'S SAVVY SPIN-OFF

By Tom Yager

Posted October 08, 2004 3:00 PM Pacific Time

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.

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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 lineup, 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 from
notebooks and home computers through the original Xserve rack server.

But its image suffered when Apple and IBM went public in high-profile
fashion 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 -- such as BMW's 3-series and 5-series -- or
G5 is meant to make G4 obsolete. If history is your guide, it's the
latter: Motorola's G4-series processors kicked its preceding line, G3,
off the market.

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. The package will also have
an integrated RapidIO bus controller, a PCI Express controller, dual
DDR/DDR2 memory controllers, and a total of four on-chip gigabit
Ethernet ports. Just to keep things interesting, Freescale is
quadrupling the total on-chip cache from 512KB to 2MB (1MB per core, but
coherent so that both CPUs benefit).

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, N.Y.,
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.

Tom Yager is technical director of the InfoWorld Test Center.


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