The manufacturer of Macintosh computers also said it will install Intel chips in all of its Mac products by the end of 2007. IBM has been Apple's microprocessor supplier for the past decade, but the company said it will be switching to Intel in order to meet what it termed changing demands from computer users.

"Our goal is to provide our customers with the best personal computers in the world, and looking ahead Intel has the strongest processor roadmap by far," said Apple Chief Executive Officer Steve Jobs at a computer-industry conference Monday, where he announced the company's latest business decision. "We think Intel's technology will help us create the best personal computers for the next 10 years," he added.

Apple had been at the forefront of manufacturing personal computers for the mass market from the 1970s, but in recent years the bulk of the company's profits have come from sales of the iPod, its digital personal music device.

Some industry analysts have cautioned Apple must return its focus to the personal-computer business if it wants to remain profitable in the long run.

Apple has been in a "kind of halo" over the past year through its iPod success, said Toni Duboise, senior analyst of desktop computers and servers at Current Analysis in San Diego, a computer technology research group.

Duboise told UPI the company needed to revamp its computer business, and acquiring a more powerful microprocessor became key to its future success. Duboise argued that some of Apple's most promising products including the desktop Mac Mini needed more processing power than what IBM microprocessors could provide.

By shifting to Intel, the Mac Mini and other products "can get more power to boost performance," Duboise said.

There are downside risks to Apple's shifting chip makers, however. For example, the company will have to adjust its operating system to accommodate the more powerful microprocessor, a changeover Apple estimates will take about two years.

Another more subtle but perhaps equally pressing issue from a marketing perspective: Apple might be seen as selling out to larger technology companies.

Computer software giant Microsoft and its information-processing software Windows, and Intel, the world's biggest chip maker, have been collectively referred to as "Wintel," particularly by those who oppose the two companies holding a disproportionate amount of market share and influence.

Apple products, with their IBM chips, have been seen as particularly attractive to those eschewing the Wintel empire, Duboise said. Now, by joining forces with Intel, Apple might alienate some of its fans, who might even boycott the company's products fearing that it, too, "has gone to the dark side," she said.

Duboise noted the latest business decision by Apple might be good for the company in the long run, but she added she would recommend classifying the company's stock as a "hold" rather than a "buy" given its near-term risks.

In late afternoon trading Monday Apple shares were valued at $37.77, down 1.23 percent from Friday's close.

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