Apple was stuck with G4/motorola and went looking for a better option. Jobs said "we like having options" "the G5 roadmap looks pretty strong". Now Apple is stuck with the G5/IBM and goes looking for a better option.
However, IBM is going to supply the PPC for the next generation gaming consoles, and there is hope that things will get better on that front. No such hope on the Motorola/Freescale front. Hence, Apple is going to ditch the G4 first. Where is the G4? In the low end, consumer products ... and in the PowerBooks. What will Apple do? Switch the consumer G4 to Intel Pentium M: cheaper consumer machines for extended penetration in the Wintel market. They will also finally anounce the long awaited PowerBook G5 with the PPC 970Fx and PowerMacs at 3GHz, shipping "this year" before holiday buying season. IF IBM cannot deliver any further enhancements, also the Pro line will switch to Intel later, otherwise it can remain in PPC land.
Why is this not a desaster for everyone? The consumers do not really care what the name of the processor is, they care about the effective speed. Want to explain the differences between PPC and x86 to the unwashed masses? Be my guest! Good luck when the eyes glaze over ... The professional customers are keeping their beloved superior PPC architecture, so nothing bad happens there. When we will again be the last in line in the MHz game, Apple will switch the pro line to the winning team. The developers are going to massively shrug. x86? PPC? It's a compiler flag, so? All of the big developers have experience with x86 code and have capable programmers on that front. Moreover, partially due to the NeXT legacy, we all are familiar with Fat binaries. End users are not even going to notice.
"But OS X on x86 is the end of the world!" No it isn't. Why would it? I hope you all understand that the Mac platform is more than just the PPC processor ... Apple has been using off-the-shelf components everywhere else for years. Plain old PC compatible Harddisks, RAM, etc. They already ported Quicktime and iTunes to Windows/x86 and it seems to be a public secret that Apple has always kept current versions of OS X running on x86 hardware. All the presuppositions are met. It is going to cost Apple quite a bit to manage the transtition smoothly, but they already managed it twice: 68k -> PPC and OS 9 -> OS X. Three's the charm. It is going to be easier: remember Darwin (the BSD foundation of OS X) already runs on x86.
"What about Altivec/VelocityEngine?" What about it? IBM "grafted" it onto the POWER 4's little brother, so why couldn't Intel do the same? I'm pretty sure Apple hs covered all the license bases needed for such a transition. We need altivec? We get altivec. If they are going to do this, they will have prepared it very carefully. I wouldn't be surprised to find that have been indeed in talks for years.
On the other hand, while still a possibility and not the maniacal suicide many took it to be, it simply could not happen. Apple is OK with current IBM delivery and hang on in there. It has hung on before in much worse situations. Perhaps they have decided that that has been bad enough and don't want to even run the risk of ending up in 450MHz G4 for more that a year again ... wait a minute: we are already there! At this WWDC it will have been _two years_ since Steve said: we will go to 3GHz in a year. Two years later we are still not there. Do you think IBM can do that and not have Apple look for alternatives? What alternatives _are_ there? Motorola? No, if Apple is ever going to switch away from the PPC they are going to do so fully, completely and in style. They are going to get the biggest vendor on board in x86 land: Intel.
I'll be following the keynote tomorrow with great interest, whatever may come or fail to come.
Disclaimer: No NDA was harmed in the production of this post.