Apple Guards Chip Stash

A deal with Freescale Semi suggests the move to Intel could take longer than expected.
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Apple Computer's

(AAPL) - Get Report

move to

Intel

(INTC) - Get Report

chips may take a bit longer than expected, if a deal announced by the computer company on Friday is any indication.

Apple has reached a new purchasing agreement with longtime supplier

Freescale Semiconductor

(FSL)

, which produces the PowerPC G4 chip for the computer maker, according to a regulatory document filed Friday by Apple. Under terms of the new deal, Apple has the right to buy -- and Freescale has the obligation to supply -- PowerPC chips through the end of 2008.

That's a full year after the date when the company plans to move its entire line of Macintosh computers from PowerPC to Intel processors. Apple uses Freescale's G4 chips in its notebook computers and in its lower-end desktop models such as the Mac Mini.

Apple spokesman Steve Dowling declined to comment on why Apple signed the new purchase agreement with Freescale. But he said the company has not changed its plans to start delivering Intel-based Macs by "this time" next year or its schedule to complete the transition to Intel processors by the end of 2007.

Intel spokesman Chuck Malloy declined to comment on Freescale's deal with Apple or whether any problems have arisen in Intel's own relationship with Apple. But Malloy said there has been no change in Apple and Intel's plans to deliver an Intel-powered Macintosh by June of next year.

Freescale spokesman Glaston Ford declined to comment on his company's agreement with Apple, saying only that the company will "work with Apple through this transition."

The deal with Freescale doesn't necessarily imply that it is delaying the completion of its move to Intel processors. Under the agreement, Apple has no obligation to buy any chips from Freescale except those in orders the chipmaker is already processing.

In other words, the deal could just be a contingency plan in case of a delay, or it could simply allow Apple to buy chips to repair or replace those used in older models.

But the deal could indicate that Apple is worried that a delay is possible or even probable.

After more than 10 years on the PowerPC platform, Apple

announced in June that it was switching to Intel chips. The company's rationale for the move was a more robust product-development pipeline for Intel chips. Apple CEO Steve Jobs also expressed frustration that

IBM

(IBM) - Get Report

, which co-produces the PowerPC line with Freescale, had been unable to deliver a low-power G5 processor that the company could use in its notebooks or a 3-gHz G5 processor that Apple had been promising customers.

Production delays by IBM had also contributed to shortages and order backlogs in the past for Apple. The move should help Apple avoid such supply constraints and could help the company's offerings become more price-competitive with those of its computer-making rivals.

But some analysts have

worried that the transition could slow Apple's computer sales as customers await the delivery of Intel-based Macs. Apple officials said the transition

had little effect on the company's computer sales in its most recent quarter, but the company is still assessing the situation.

The announcement came after the bell on Friday. In after-hours trading, shares of Apple were off 4 cents, or less than 1%, to $45.70. The company's stock closed regular trading off 32 cents, or about 0.7%, to $45.74.

Staff Reporter Chris Kraeuter contributed to this report.