Apple could build Penryn into Xserve

While Apple is tight-lipped about the introduction of new Mac systems with
Intel's latest Penryn processors, analysts said the company's Unix-based Xserve
servers could be the first to include the power-efficient Penryn chips.

Rumors predict Apple's Mac Pro workstations being the first Mac system to include
Penryn processors, though it makes sense for Apple to first plug Penryn chips
into Xserve machines to start upgrading its product portfolio from the top,
analysts said.

The first Penryn chips, like the Xeon 5400, are the upper echelon of chips
designed to first appear in servers and high-end desktops, not home PCs, said
Samir Bhavnani, an analyst with NPD Group. The first introductions could be
Xserves and Mac Pro systems, then other Mac desktops and laptops as Intel releases
chips for those systems, Bhavnani said.

Apple needs something to replace the rusting Xserve machines, and it would
make sense for Apple to release a new server by year's end to immediately upgrade
its product portfolio, analysts said.

"It's a no-brainer," said Dan Hutcheson, CEO of analyst firm VLSI
Research. "You'd want it in the stores before Christmas," he added.
Intel has been manufacturing Penryn chips for some time and has built up a large
inventory, so it is feasible that Apple will launch high-end Mac Pro desktops
too, Hutcheson said.

Dean McCarron, founder and principal of Mercury Research, agreed that Apple
should launch workstations in time for holiday shopping. However, most manufacturers
have already locked up product announcements as part of the system refresh cycle
for the shopping season, so it's likely Apple will launch the products early
next year, McCarron said.

Macworld, to be held Jan. 14 to Jan. 18 in San Francisco, is a big product
showcase for Apple, and most likely the first Penryn-based Apple server and
workstations and will be announced there, analysts said.

"Some of the rumors have been 'Apple's been buying [Intel chips] up.'
It's not like Apple will have it on their systems exclusively," Bhavnani
said. Hewlett-Packard and Lenovo have already announced workstations carrying
Intel's new Xeon 5400 processor based on the 45-nanometer Penryn architecture.
Apple won't rush to make a major announcement until Macworld, though it could
announce a minor laptop or desktop refresh, Bhavnani said.

Intel is working on Penryn products with around 40 system vendors, including
Apple, said Stephen Smith, director for Intel's digital enterprise group operations.
Intel cannot comment on Apple product releases, Smith said.

When Apple does put Penryn chips on Mac OS systems, users will be thrilled
by the chip's improved graphics performance, Bhavnani said. The new chip's focus
is high-definition, and Intel focused on improving video compression capabilities
on the chips, which could improve a Mac's graphics capabilities, Bhavnani said.

"Because of the reputation Apple has for graphics and video, that reputation
will be enhanced by being one of the first to have Penryn chips," Bhavnani
said.

The new chips will also be more power efficient and provide better overall
system performance, Bhavnani said.

Apple does not comment on speculation, a company spokeswoman said.