Apple Courting Core Meltdown

But what Jobs failed to note is that Apple lost customers and market share with each of those transitions. Indeed, since the early 1990s, Apple has seen its share of the PC market slip from more than 10% to about 2% in recent quarters. Analysts have blamed that fall in part on those big changes, which created compatibility issues similar to those that could arise with the move to Intel chips.

"That's part of Apple's DNA," says Roger Kay, a technology analyst at research firm IDC. "Apple has sheared away all the people who want compatibility. All the people who want compatibility are using" Windows-based computers running on Intel chips.

But the big hope for Apple investors has been that dominance in online music players would help staunch the decline in PC market share. The company sold $2.2 billion in iPods in the first six months of its current fiscal year, up from just $520 million in the same period a year earlier, and claims to hold some 76% of the market for digital music players.

The strategy does seem to be having some success. In the first six months of this fiscal year, Macintosh sales have grown 28% to $3.1 billion, a rate significantly faster than that of the broader PC market.

Although Apple has just a small portion of the overall PC market, Macintosh sales constitute the lion's share of total company revenue. Even a small shift in overall PC market share in Apple's favor could provide a big boost to earnings.

But the move to Intel-based computers could give consumers pause. A subset of PC purchasers always wants the latest and greatest devices and will avoid buying now if they know something better is just around the corner, says Van Baker, a consumer technology analyst at research firm Gartner. Apple's transition could well dampen sales for Macintoshes until the new Intel-based ones come out, Baker says.